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Saturday, May 5, 2012

Fertility, Ageing, Productivity and Immigration 2012

S’pore could be ‘extremely aged’ by 2050: IPS study’pore-could-be-‘extremely-aged’-by-2050--ips-study.html If Singapore’s total fertility rate continues at its current pace and if no new citizens or permanent residents (PRs) are added, the country’s population will become “extremely aged” by 2050, says a new report from the Institute of Policy Studies (IPS). This alarming projection was revealed on Thursday morning by researchers from IPS at a roundtable on Singapore’s current population trends. Based on the two assumptions, come 2050, elderly Singaporeans aged 65 and above could constitute one in every three citizens and PRs, said IPS senior demographer and research fellow Yap Mui Teng, who led the study. “The median age of (Singapore’s resident) population will also rise from 39 two years ago, to 49 in 2030, and 55 in 2050,” she added. In addition, she said, if Singapore’s fertility rate remains at its current low of 1.24, the number of younger Singaporeans and PRs (aged between 15 and 64) for every older resident (aged 65 and above) will plunge. From about 7.7 younger residents supporting every elderly resident in 2010, the study projected an eventual decline to fewer than two younger Singaporeans and PRs supporting every elderly resident in 2050. Participants at the roundtable discussion, however, questioned some of the assumptions in the study. Special adviser to the IPS Tommy Koh pointed out that the dependency ratio is based on the assumption that after the age of 65, people go from being contributing members of society to liabilities, but contended that this should be revisited as people may be living longer, but want to continue to work. Prof Koh, who is also Singapore's ambassador-at-large, added that many elderly people also have enough savings and don’t depend financially on their children. Yeoh Lam Keong, adjunct senior fellow at IPS and former chief economist at the Government of Singapore Investment Corporation, questioned the economic benefits of having the country’s workforce grow strongly. Referring to the period focused on in the IPS study, Yeoh compared two separate scenarios where the number of non-residents accepted into Singapore came up to one in every five people, and one in every three respectively, gleaning that the resulting hike of 1.2 million people in Singapore between the first and second scenarios translated only to a 0.6 per cent GDP growth. He pointed out that high-income countries such as France, Finland and the United States, which maintain almost-replacement levels of fertility rates, have seen a labour force growth of between 0 and 1 per cent since the 1970s with no issues. In contrast, Singapore's labour force has been growing at a rate of between 3 and 4 per cent annually, similar to the rate of a developing country, he added. In IPS’ study, in another scenario, if no new citizens were added each year and the fertility rate rose to 1.85, Singapore’s total population would help slow down the ageing of the work force, although not as effectively as it would if new citizens and non-residents were brought in. But IPS researchers also noted — as has observed by some quarters — that a lack of integration of these foreigners into the city-state’s homegrown society will pose a key challenge to Singapore in coming years. These findings shared by the IPS come hot on the heels of a paper by the National Population and Talent Division released last week, which projected equally dismal growth trends for Singapore’s population and resident labour force given its current fertility rate and increasing life expectancy. The NPTD study projected that some 900,000 baby boomers will retire from the nation’s workforce over the next 30 years, contributing a great deal to this ageing trend. .. Is it really impossible to raise Singapore’s fertility rate? No, said prominent sociologist Paulin Straughan. Speaking at Thursday’s Institute of Policy Studies (IPS) roundtable on population trends, Straughan suggested that Singaporeans will have more babies if they change their attitude towards their career. The former Nominated Member of Parliament said that young people between the ages of 25 and 29 are reluctant to date or get married because they are too caught up trying to scale the corporate ladder. “(Meritocracy) is what pushes our young Singaporeans into overdrive in paid work,” she said, before adding: “Because we are a capitalist economy, work achievements have transformed the way we deal with ourselves until it has become, for many, the only mark of success.” There is also a lack of clear key performance indicators, or KPI, for local workers, which results in many of them spending more time in the office, in the hope that this will translate into better appraisals from their supervisors. “Our workforce has logged the longest hours’ work, yet our productivity figures are among the lowest in the world. We have a situation where we are living in the office and yet doing very little — something is wrong,” she said. To change that, Straughan said a revamp of the remuneration system in Singapore is needed. At the roundtable, she suggested that the base salary for workers could be increased, while performance-related bonuses are reduced. She also urged companies to adopt “flexible work arrangements”. These measures, said Straughan, will help to improve work-life balance, and take the pressure off Singaporeans who feel the only way to advance in their careers is to work long hours. With more time on their hands, Singaporeans can then “prepare” themselves for parenthood and boost ground-up citizen population growth. Recruitment and human resource (HR) professionals contacted by Yahoo! Singapore were in favour of Straughan’s suggestions, calling them a move in the right direction. Associate director of HR at recruitment consultancy Robert Walters Singapore Joanne Choo said the measures will help to create a better positive work environment, which impacts the quality of one’s life in turn. “With better work-life balance, many professionals will definitely be more motivated to consider starting a family,” she said. She noted, however, that having children is ultimately a personal decision, and a change of mindset may take some time. Choo added that for such measures to work, all parties — namely the government, businesses and employees — will have to “buy in” to them. “One institution is linked to another and they don’t work solo, so you can’t expect the fertility rate to pick up simply from implementing one measure alone,” she said. Choo also suggested further measures to make the work environment more conducive for family expansion, and these included granting paternity leave, and welcoming new mothers back into the workforce. Another expert, associate director at recruitment company Robert Half Singapore Stella Tang also saw merit in Straughan’s proposals, saying these changes will help to encourage people who have family responsibilities to stay in the workforce for a longer time, or to re-enter it after taking time off to start a family. “As Singapore employers battle to retain their best talent, they need to look at more flexible work arrangements as a means of holding on to quality staff,” she explained. Abolish PSLE and streaming for a better education system? At the IPS discussion, Straughan also proposed radical changes to Singapore’s education system. For example, she suggested scrapping the primary school leaving examination (PSLE), as well as streaming, and replace it with a 12-year primary and secondary school system (six years each) that focus on imparting learning techniques. “Get rid of PSLE, get rid of streaming. Let the child go into school at Primary 1 and enjoy learning all the way through to the entrance exams into university,” she said. “I think that will be a major transformation for parenting in Singapore.” The other changes Straughan called for include doing away with tuition and for a review to be done to ease the pressure on school teachers. Commenting on these measures, Arthur Foo, a young father of two, said he would be supportive of such changes if they allow children to experience more holistic development instead of simply focusing on academic intelligence. “I think our children are acculturated to be exam-smart but not as street-smart as those in countries where academic achievement is not the only route to success,” he said, noting, however, that a suitable alternative to Singapore’s practice of selection by meritocracy must be found before the changes can be made. Paulin Straughan’s suggestions at a glance: Reducing the performance bonus aspect of remuneration, while increasing base salaries instead Encouraging mainstream application of flexi-work arrangements Evolving clearer, more objective indicators of good performance, instead of vague performance markers that force workers to go into “overdrive” in a bid to attain them Establishing a better work-life balance Reducing reliance on face-time, the amount of time one spends in the office. Scrapping streaming and PSLE for primary school students and implement a 12-year primary and secondary school system (with six years for each) that allow students to focus on learning, instead of passing examinations. Immigration will help solve Singapore’s population problem: paper An inflow of between 20,000 and 25,000 new citizens will be needed to keep the population of Singaporeans stable, according to a report by the government’s population arm. The National Population and Talent Division (NPTD), a group under the Prime Minister’s Office, said in a paper that immigration and raising Singapore’s total fertility rate will delay and slow down the speed at which the population of citizens declines based on a series of scenarios it simulated and charted covering a period up to 2060. Its projections in the paper, titled “Citizen Population Scenarios”, hinged on variations between Singapore’s fertility rate (between the current level of 1.2 and the replacement level of 2.1) and the number of new citizenships granted in each year (zero, 15,000, 20,000 and 25,000).
The report highlighted that in the coming 18 years, some 900,000 Baby Boomers — adults born in the post-World War II period — will be retiring from the workforce, causing an “unprecedented age shift” in Singapore’s citizenry and exerting adverse consequences on its citizen workforce. “An inflow of 25,000 new citizens per year would keep the size of our working-age citizen population relatively stable,” NPTD said in the paper. Even if Singaporeans were producing enough babies for replacement, the number of working-age citizens would still fall by about 300,000, it said. With an annual immigration of 20,000 new citizens, the decline would be lower at 200,000, whereas the number of such citizens would remain approximately the same if the inflow were at 25,000 new citizens.
NPTD also pointed out that citizen deaths are projected to outstrip Singaporean births by 2025, leading to a significant decline in our citizen population, due to the current low fertility rates. The report showed that maintaining the existing fertility rate alone would result in a citizen population decline of almost 750,000 citizens by 2060. NPTD also warned that “our citizen population will age, and age rapidly” as the median age of the citizen population would rise from 39 years last year to 47 years in 2030. “Raising total fertility rates alone will not fully mitigate the effects of a declining and ageing citizen population, particularly in the next two decades,” concluded the report, adding that immigration will not only help to mitigate the rate at which Singapore’s citizen population declines and ages, it will also help to revitalise it.

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