Economics. Singapore’s Ageing Population and Workforce

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Ageing is continually becoming a dominant factor for consideration in many countries around the world. Analysts point out that this problem is overtaking gender as a factor the outstanding factor in workforce diversity in many countries. Singapore is not an exception. With a low fertility rate coupled up with a low mortality rate, Singapore’s labour force has inclined towards the aged. Consequently, Problems related to skill level, the embrace of technology, discrimination et cetera have become so rampant that human resource practices addressing this problem have become a prerequisite for a successful business organization. Precisely, disequilibrium between a younger and older workforce with the older generation’s advantage leads to the economy’s experiencing high capital intensity which has a great implication on the average wage. This eventually leads to increased pressure on the economy. The only way Singapore can address this problem is through the development of strategies that would increase the productivity of the ageing population so that their wage consumption matches their productivity (Andrews, 1992).

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The Trend

The present state of the Singaporean population structure has its roots in the sixties when the Total Fertility Rate (TFR) was estimated at 6 children per woman. This called for a policy reformation that could discourage families from bearing more than 3 children. This involved the use of incentives and other measures that discouraged the women. Consequently, the effects started to take their toll in the seventies. However, this did not discourage their efforts in the aggressive campaigns (Brown, 1998). Among the most embraced approaches was the denial of maternity leave for a third child and they’re subsequent. Also, a third child or a subsequent would not be enrolled in primary one unless one of the parents underwent sterility. These efforts bore fruits. By 1986, the population growth rate of Singapore was estimated at zero per cent. However, this posed another threat to the economic wellbeing of the country. The government policymakers realized that it was not experiencing any growth. This led to the reversion of the policies to encourage families to bear more than three children. This involved the formation of incentives. The government formed the Child Development Account where the government deposited $500 for any second child and $1000 for any third child. This money could be used in the education of all children in the family. However, the trend stops at age six.


Rapid structural changes could pose great challenges to an economy that is characterized by an ageing population. According to Thangavelu and Wei (2006), such an economy will be faced with an increased rate of human capital deficiency about technology-specific skills. This is as a result of the experienced differences in the specific needs of skills in the jobs created as compared to the jobs being faced off. As a result, the lowered productivity could lead to a dampened economy due to increased wages concerning reduced productivity created by inadequate skills (Straughan, Chan & Teo, 2001).

This case is very likely to be experienced in Singapore if appropriate measures are not taken. Over years, the country has witnessed increased changes in their structure. As a major point of concern, globalization has opened up the Singaporean market and to the rest of the world. Secondly, the workforce has also been subjected to technological changes where discoveries are changing the approach to certain tasks. This means that business organizations and government institutions that are endowed with the task of the economic wellbeing of the country are forced to come up with policies that address these changes to ensure their survival (Cowgill & Holmes, 1972).

Education plays an important role in the general productivity of an individual worker. Studies point out that work with better education is more productive as compared to his less-educated counterpart. This is attributed to their ease to adopt new ideas and their encompassing of contemporary discoveries in research. Equally, older workers tend to be less educated while the incoming generation is more educated within a system that addresses contemporary challenges in the market. This gives the younger generation an upper hand while subjecting the older generation too early retirement or general retrenchment. Earlier, the Western world had experienced these problems making organizations choose between retaining the less educated older generation and a younger generation that is more educated. This means that the older generation faces an increased risk of discrimination at the hand of the younger generation. In her study on age and worker productivity (Choon & Low, 1996) argues that the productivity of an employee is directly dependent on his age. However, the direction of the changes is pure as a result of the relationship between age and other factors of production. Education is one of the factors of production.

The relationship between age, education and productivity has been witnessed in the Singapore economy. The study by Inter-Ministerial Committee on Ageing Report, (1999) point out that advancement in the age concerning education impacts greatly on the economy of the country. Their study showed that an ageing individual with a higher level of education like a degree or above is very productive. However, their productivity is comparatively less in certain sectors than in others. For instance, such workers are less productive in the manufacturing sector which calls for more structural changes as compared to the service sector. This means that deliberation is a prerequisite to ensure that the correct decisions are made to attain the highest possible productivity of the workforce. The study, which availed a labour quality index in Singapore pointed out that different age groups with different education levels have different impacts on the productivity of the economy. This situation calls for policy implications that will place necessary policies that will assist the aged population to be more productive. For instance, the aged population could be retained in the service industries that tend to be stable in terms of structural changes as compared to the manufacturing sector where newer younger and more educated workers should be hired to meet the technological changes (Jones, 2000).

Despite their reduced knowledge of technological changes, it is the technology that assists them on the other hand. For instance, government policymakers in Singapore, which has more than 25 per cent of its population above age 65 with a retirement age of 75 were forced to embrace assistive technology for this ageing workforce (Kinsella, 2000). This means that ageing could reduce the productivity of a worker. However, the level of productivity could be increased if the economy invested more in assistive technology. This includes the use of robotics, biomedical technologies, molecular research that would assist bolster the solutions to underlying age-related mal-functioning, neuroeconomics, et cetera. All these would increase the productivity of the aged population through increased motivation and efficiency (Patrickson, 2006).

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The dependency ratio is another factor that will be implicated by an ageing population. Chan (1990) predicted that the old-age dependency ratio would decrease greatly as a result of an ageing population. By the year 1990, an average elderly man from Singapore received support from 9.8 people. However, the changing demographic characteristic of the country has led to great changes in this ratio. The estimated ratio by Chan in the year 2000 was expected to be one elderly Singaporean being supported by 3.5 people. In terms of care and wellbeing of this age group, the quality will greatly be implicated. Therefore, an ageing workforce old-age dependency ratio hence causes a strain on the provision of care (Government of Singapore census of population, 2006; Vasco, Ngiam & Cheung, 2000).


As a change manager, one of the most pronounced findings is the need for long term anticipation for any policy formulation. In the case of Singapore, the sixties’ population was increasing too fast. As mentioned, the average number of children per woman was six children. Policies aimed at checking the increasing population needed to be enacted. This led to disincentives and other legislative policies. True to their expectations, the birth rate of the country reduced to zero per cent during the mid-eighties. While one can say that the move was relevant as per the need of that time, the policy formulators had not considered the long term implications of the policies. It is from these policies that the current economic speed bump of the ageing population was created. Therefore, moderation must be done to achieve the desired results while at the same time reducing the expected future implications (Pious, 1995; Pool, 2000).

Secondly, a thorough analysis of the productivity of each item in the demographic composition must be comprehended to make good use of the population without providing too many wages to a less performing workforce or retrenching workers that would be otherwise productive to the economy (Rao, & Lee, 1995).

As a good change manager, technology must be utilized to its maximum. Concerning an ageing population, managers must make use of assistive technology which will help the old workers to continue performing productively irrespective of their age. As mentioned earlier, not every ageing worker is useless to the productivity of an organization. There are dependent factors to put into consideration before deciding on the way forward. For instance, an organization that specializes in the service industry should retain more of its ageing population which is more productive in comparison to the younger population. However, manufacturing sectors must ensure that they hire a more young educated workforce which is most important in the ever-changing structure (Shantakumar, 1996).

In conclusion, the productivity of a workforce is highly dependent on the age of its members. However, age in itself does not have too many implications for the economy. Instead, the average of the workforce differs in their productivity depending on the other factors that affect productivity. Among them is education level. In addition, technological changes in the environment can have opposing impacts on the economy. On one part, it becomes difficult for the older members of the workforce to adopt incoming technology. This is attributed to the limited skills acquired during their education. On the other hand, assistive technology can be used to assist old age workers to continue leading productive lives.

List of References

Andrews, G. (1992) “Research Directions in the Region: Past, Present and Future”. In Ageing in East and South East Asia, edited by D.R. Phillips, pp. 22–35. Edward Arnold: London.

Browne, C. (1998) Women, Feminism and Aging. New York: Springer.

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Chan, A. (1990). Singapore’s changing structure and policy implications for financial security, employment, living arrangements and health care. Asian Metacenter research paper series number 3.

Choon, A.T. and L. Low. (1996) ‘Social security: How Singapore does it’, Asia-Pacific Journal of Social Work, 6(1), pp 97-119.

Cowgill, D. and L. D. Holmes (Eds). (1972) Aging and Modernization, New York: Appleton-Century-Crofts.

Government of Singapore. Singapore Census of Population. Advanced-Data Release no. 6, 2000.

Inter-Ministerial Committee on Ageing Report. (1999) Ministry of Community Development: Singapore.

Jones, G. W. (2000) ‘Human capital aspects of economic development: a comparative perspective in Asia’, Paper presented at the IUSSP Conference on Age Structural Transitions and Policy Implications, Phuket, Thailand.

Kinsella, K. (2000) ‘Demographic dimensions of ageing in East and Southeast Asia’, in Phillips, D.R.(ed). (2000), Ageing in the Asia-Pacific Region: Issues, Policies and Future Trends, Routledge: London.

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Patrickson, M.(2006) Asia’s ageing workforce: The emerging challenge for the twentieth century. International Journal of Organizational Behavior, 3(1), pp. 53-63.

Pious, J. (1995). Re-skilling older workers. Productivity Digest. pp. 16-24.

Pool, I. (2000) ‘Age-structural transitions and policy: frameworks’, Paper presented at the IUSSP Conference on Age Structural Transitions and Policy Implications, November 8-10, Phuket, Thailand.

Rao, B. and Lee, C. (1995). Sources of growth in singapore economy and its manufacturing and service sectors. Singapore economic Review , 38(2), pp. 231-251.

Shantakumar, G.(1996). Productivity and labour supply in singapore. Economic policy management in Singapore, 4(2), pp. 126-138.

Straughan, P., A. Chan, and P. Teo. (2001) The determinants of changes in perceived health among older Singaporeans, Working Draft: National University of Singapore.

Thangavelu, S. and Wei, Y.(2006) Aging and economic growth: Issues relevant to Singapore. Department of economics SCAPE Working Paper Series. Paper No.3.

Vasoo, Ngiam and Cheung.(2000) ‘Singapore’s ageing population: social challenges and responses’, in Phillips, D.R. (ed), Ageing in the Asia-Pacific Region: Issues, Policies and Future Trends, Routledge: London.

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BusinessEssay. "Economics. Singapore's Ageing Population and Workforce." December 3, 2021.