page 1may 29, 2012rainer münz e r s t e g r o u p b a n k a g rainer münz erste group ifa 11th...

May 29, 2012Rainer Münz

E R S T E G R O U PB A N K A G

Rainer MünzErste Group

IFA 11th Global Conference on AgeingPrague, May 29, 2012

Global Challenges: Ageing and potentially shrinking labour forces



Global demographic trends



20th Century



21st Century



Reality no. 1:Growing world population



From 6 billion to 7 billion people: Contribution per continent to earth’s 7th billion

Asia Africa Latin America North America Europe Oceania



3Total Population change by Major Area,1950-2100

Source: UN, 2010



… Europe’s, Russia’s and Japan’s populations have already started to shrinkProjected population growth, 2010-2050, in %

Source: Berlin Institute 2010

to -20 %-20% - -5%-5% - 0%0% - 25%25% - 75%75% - 100%100% - 150%150% - 200%above 200%n. a.



Some Regions of Europe have the most rapidly shrinking populationsProjected population change 2010-2030, in %

Source: Berlin Institute 2010



Reality no. 2:Global ageing



Demographic ageing is a global phenomenon Total Population change age groups 0-19 vs 50+, 1950-2100

Source: UN, 2010

Age 0-19 Age 50+



Europe is continuously getting older

1.00 0.75 0.50 0.25 0.00 0.25 0.50 0.75 1.00

0

10

20

30

40

50

60

70

80

90

100

Alt

er

in % Men (2010) Women (2010)

Men (2050) Women (2050)

Source: Eurostat, Europop 2008

1950

2010

2050Ag

e



… and driven by two trends



Source: UNPD 2011

During the last six decades, global life expectancy has increased by 20 yearsLife expectancy by world regions, 1950-2015

30

40

50

60

70

80

1950-1955 1970-1975 1990-1995 2010-2015

AfricaAsiaEuropeLatin America

North AmericaOceaniaWorld



In the same period, the overall number of children per woman has halved Total fertility by world regions, 1950-2015

0

1

2

3

4

5

6

7

1950-1955 1970-1975 1990-1995 2010-2015

AfricaAsiaEuropeLatin AmericaNorth AmericaOceaniaWorld

Source: UNPD 2011



Today 50% of humanity live in societies with less than 2 children per family World population by Total Fertility, 1950-2100

Source: UN, 2010

Po

pu

lati

on

in

mil

lio

n



… however, demographic ageing is not affecting all

regions the same way



Europe and Japan have the oldest populationsShare of age group 65+ in total population

Source: UNPop Div 2011

n. a.

to 3%

3% - 6%

6% - 9%

9% - 12%

12% - 15%

above 15%



Slowly growing population

Low life expectancy, high fertility

Fast growing populationIncreasing life expectancy,

gradually sinking fertility

Stagnating populationHigh life expectancy,

low fertilityShrinking population

Ageing society

Chad

Ethiopia

India

South Africa

Egypt

IndonesiaBrazil

France

Russia

Germany

Italy

Niger

Nigeria

China

USA

Japan

The demographic development of the richer world is in a very advanced stage: Countries with a stagnating or shrinking native population account for four-fifth of world economy



What challenges is the rich world facing

due to demographic trends?



Challenge no. 1:Aging and eventually

shrinking labour forces



Demographic trends affect labour supply highly differentlyDevelopment of labour force until 2020 (in %)

Source: based on ILO data 2011

below -5%

-5% - 0%

0% - 10%

10%- 20%

above 20%



In some developed countries working-age populations have already started to shrinkWorking-age population, in million

Source: The Economist 2012



What can we do?



Work 10 years longer than today



29,6 30,234,0 34,2 34,4 35,0

36,6 37,3 37,639,6 39,7 40,5 41,1 42,3 42,4 43,5 43,6

46,3 46,548,2 48,6 49,2 50,0

53,7 53,856,2 56,8 57,1 57,6 57,7

60,3

65,268,0 68,6

70,5

79,8

TR MT PL MK HU SI IT BE HR LU FR SK RO GR AT BG ES EU CZ LV LT PT IE NL EE FI CY UK DK DE US JP CH NO SE IS

an

Therefore, labour force participation rate of the age group 55-64 needs to be increasedLabour force participation rate of the age group 55-64, 2010

Source: Eurostat 2012 EU-27 average

Non EU countries

EU countries



Working longer is an option, but employing the elderly needs adaptation in several areas

Lifelong learning

New pension system

New salary system



… even if such measures are not cheered by parts of the electorate



Increase female labour force participation



Increase labour productivity



Bring in more migrants



Source: Eurostat, 2010.

Median EU-27: 40.6 years

Median Immigrants: 28.4 years

Migration helps reducing the pace of demographic ageing EU-27, age structure of population and of immigrants



The challenge is to attract the right skills



… via smart migration policies?



Source: Fargues 2010

The US more easily attracts talent and skills Immigrants of birth cohorts 1935-1975 in the US, Canada, Italy and Spain by average years of schooling



Tomorrow, the developed world will compete for

workforce, especially for young and skilled

migrants



...but today, the problem seems to be another oneYouth unemployment (age 15-24, in %)

Source: OECD



None of the mentioned strategies alone is

enough to overcome the ageing problem, but

their combination might do it



All strategies are highly unpopular in Europe,

but much less so in the US and Canada



Challenge no. 2:Integration within

increasingly diverse societies



How to encourage integration?



How to deal with ethnic, cultural and religious diversity?


E R S T E G R O U PB A N K A GIf you want to know more

Overcrowded World? Global Population and International Migration

Haus Publishing

ISBN: 978-1-906598-10-5

€ 9.95; $14.95, £ 9.90



Thank you for your attention!

[email protected]

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