Preparing for the inevitable in labour supply

A study by Oxford Economics has forecast that Singapore’s labour supply will shrink by 1.7 percentage points in the 10 years through 2026, and by 2.5 percentage points in the following decade, after accounting for changes to the participation rate (Singapore faces double whammy in labour supply: Study; Sept 7).

The decline of our total fertility rate (TFR) below the replacement rate of 2.1 since the late 1970s and the rapid ageing of the population have led to the labour shrinkage. At a recent conference, the International Monetary Fund said that Asia’s population is ageing faster than anywhere else in the world (Ageing population will slow Asia’s growth: IMF; Sept 8).

With Asia as our main source of foreign labour, a rapidly ageing population would pose a constraint on the supply of our foreign labour. Competition for foreign labour would be keener.