The Straits Times: Aging and Immigration

Wealthy nations with low fertility rates have aging populations with decreasing numbers of working-age adults. Achieving economic growth and sustained living standards requires increasing fertility, productivity, immigration or increasing numbers of women entering the workforce, suggests Ravi Menon, managing director of the Monetary Authority of Singapore, as described by Vikram Khanna, associate editor of the Straits Time. Governments can enact flexible immigration policies that respond to economic cycles and rely on foreign workers that complement the local workforce. An International Monetary Fund study points out that the effects of an aging workforce varies by industry, with declining skills in technology and improved skills among lawyers, professors and physicians. Policies drafted to increase fertility rates are costly and encompass cultural changes, while immigration policies can be target social and industry needs. “The greater availability of workers enables companies to earn higher returns on capital and increase investments,” Khanna explains. “Thus, existing companies expand and new ones emerge, contributing to higher economic growth and more job creation. Younger immigrants also broaden the tax base and add dynamism to entrepreneurship.” Governments can avoid disruptions with advance planning and well-designed policies. – YaleGlobal