Divergent work-force changes have strategic implications for economic activity. Working-Age Population

Next 11

Level

(millions) Absolute Change

2010

2010-30 2030-50

Nigeria

86.3

54.3

51.6

Pakistan

109.6

62.9

51.5

Philippines

58.3

23.6

14.9

Egypt

53.4

20.7

11.8

Bangladesh

107.2

34.9

6.8

Turkey

51.2

11.3

-0.1

Indonesia

156.4

31.8

-3.8

Iran

53.6

10.7

-2.9

Mexico

72.5

13.3

-6.3

Vietnam

61.1

10.5

-0.9

S. Korea

35.3

-3.7

-7.6

India

780.6

241.1

76.3

Brazil

132.2

18.4

-13.4

China

973.3

9.9

-113.1

Russia

101.2

-17.0

-14.2

Argentina

Large Economies Australia

26.2

4.8

1.2

14.5

1.4

1.3

U.S.

BRICs

POPULATION AGE SHIFTS WILL RESHAPE GLOBAL WORK FORCE

Percent Change 2010-30 2030-50

April 2010 Adele Hayutin, Ph.D. Director, Global Aging Program [email protected] Continued growth

Change in Working-Age Population, 1990-2010 Over the past 20 years, the fastest growth in working-age population occurred in Africa, the Middle East, and Asia. Worldwide, the working-age population increased by 40%, or 1.3 billion, with 95% of that growth occurring in less developed countries. Asia accounted for two-thirds of worldwide growth and Africa 20%.

Slow growth, then shrinking

Divergent patterns

Change in Working-Age Population, 1990-2010

212.3

18.1

17.5

Canada

23.6

1.0

1.6

U.K.

40.9

1.2

1.8

Spain

30.8

0.7

-4.1

Moderate Growth (25% to 50%)

France

40.5

-1.1

-1.0

Too Fast to Absorb (50% to 100%)

Netherlands

11.2

-0.7

-0.3

Dangerously Fast (> 100%)

Italy

39.3

-3.0

-5.9

Germany

54.3

-8.1

-7.4

Japan

81.6

-13.0

-16.7

Continued but slow growth

Shrinking (-25% to 0%) Slow Growth (0% to 25%)

Shrinking

Projected Change in Working-Age Population, 2010-30

-40%

-20%

0%

Definition: Working-age population = 15-64 Data Source: United Nations, World Population Prospects, The 2008 Revision Medium Variant Forecast

20%

40%

60%

©2010 Stanford Center on Longevity http://longevity.stanford.edu

Growth will slow almost everywhere. Most advanced economies face shrinking work forces, while many less developed countries face explosive growth. Europe’s working-age population is projected to decline by 10%, or nearly 50 million. Less developed countries are projected to see a work-force gain of nearly 1 billion, with about half of that occurring in Asia and nearly 40% in Africa.

The Global Aging Program at the Stanford Center on Longevity focuses on the economic and political implications of longevity. The program specifically addresses the risks and opportunities of population age shifts around the world. Understanding the implications of these changes will be critical for effective policy making. The Stanford Center on Longevity is working to transform the culture of human aging. The Center studies the nature and development of the entire human life span, looking for innovative ways to use science and technology to solve the problems of people over 50 and improve the well-being of people of all ages. To inspire change of this scale, the Center brings together the best minds in academia, business and government to target the most important challenges and solutions for older populations. The Center was founded by two of the world’s leading authorities on longevity and aging, Stanford professors Laura L. Carstensen, PhD, and Thomas Rando MD, PhD, and received its initial funding from Texas investor Richard Rainwater. Adele Hayutin, Ph.D., Senior Research Scholar and Director of SCL's Global Aging Program, is a leader in the field of comparative international demographics and population aging. Dr. Hayutin combines broad knowledge of the underlying data with the ability to translate that data into practical, easy to understand language and implications. She has developed a comparative international perspective that highlights surprising demographic differences across countries and illustrates the unexpected speed of critical demographic changes. Previously she was director of research and chief economist of the Fremont Group (formerly Bechtel Investments) where she focused on issues and trends affecting business investment strategy. Dr. Hayutin received a BA from Wellesley College and a Master's in Public Policy and a Ph.D. in economics from the University of California at Berkeley.

Change in Working-Age Population, 2010-30 Shrinking (-25% to 0%) Slow Growth (0% to 25%) Moderate Growth (25% to 50%) Too Fast to Absorb (50% to 100%)

Global Aging Program Stanford Center on Longevity 616 Serra Street, E Wing 5th Floor Stanford, CA 94305-6053 (650) 736-8643 http://longevity.stanford.edu/myworld

Dangerously Fast (> 100%) Definition: Working-age population = 15-64 Data Source: United Nations, World Population Prospects, The 2008 Revision Medium Variant Forecast ©2010 Stanford Center on Longevity, http://longevity.stanford.edu

Dramatic changes in work-force size are occurring around the world.

Global Work-Force Change

Working-age populations grew almost everywhere over the last 60 years. Due to declining fertility rates, many economies will see their work forces peak and level off or even begin to shrink within the next 40 years. Work forces in Germany, Japan and Russia are already shrinking. Projected declines in working-age population underscore the urgency of adapting labor policies to the new demographic reality.

Working-Age Population, Indexed to 2010 UK

Sweden

Russia

Working-Age Population (15-64) indexed to 2010 (2010=1.0)

Canada

Germany

EU 27 Italy

China

Iran

Japan

Turkey

More Developed Regions

World

2

Mexico

South Korea

Poland

By 2050, the worldwide working-age population is projected to be 1.3 times the 2010 level, an increase from 4.5 billion to 5.9 billion.

US

Less Developed Regions

India

1

Pakistan

Bangladesh

Egypt

0 1950

Philippines

Saudi Arabia

2050 2010

Colombia

Vietnam

Nigeria Singapore

Brazil

Dem. Rep. of Congo

Indonesia

15 Largest Work Forces, 2010 Several large countries (in bold below) will face smaller work forces by 2050.

Argentina

Working-Age Population Millions Country 1. China 2. India 3. United States 4. Indonesia 5. Brazil 6. Pakistan 7. Bangladesh 8. Russia 9. Nigeria 10. Japan 11. Mexico 12. Vietnam 13. Philippines 14. Germany 15. Iran EU 27 World

1950

2010

2050

337.8 973.3 870.1 220.8 780.6 1,098.0 102.2 212.3 247.9 43.9 156.4 184.3 29.9 132.2 137.2 23.8 109.6 224.1 25.2 107.2 148.8 66.7 101.2 70.1 20.3 86.3 192.2 49.4 81.6 51.8 15.0 72.5 79.5 17.5 61.1 70.6 10.6 58.3 96.8 45.9 54.3 38.7 9.4 53.6 61.3 246.4 333.4 279.8 1,536.0 4,523.7 5,865.8

Indexed 2050 2010

Chile

0.89 1.41 1.17 1.18 1.04 2.04 1.39 0.69 2.23 0.63 1.10 1.16 1.66 0.71 1.14 0.84 1.30

NB: For these charts, working age is defined as 15-64. The UN projections used here assume migration continues at approximately current levels. Potential work-force size could be further expanded by increasing labor force participation rates at the traditional working ages or by expanding the definition of working age to include older workers.

2.0

Australia

South Africa

1. Large Economies

2. BRICs

3. Beyond the BRICs

Among the large economies, only the US and the UK will see growth in working-age population. Japan and Germany face steep declines.

These large emerging economies face divergent patterns of work-force growth. Russia’s working-age population has already been declining while China’s will peak in 2015.

Among the “Next 11” emerging economies, only the youngest will face continued work-force growth. The oldest, South Korea, faces a steep decline in working-age population.

Working-Age Population, 2010=1.0

2.0

Working-Age Population, 2010=1.0

2.0

Working-Age Population, 2010=1.0

Nigeria Pakistan Egypt

India US UK France China Germany Japan

1.0

1970

Data Source: United Nations, World Population Prospects, The 2008 Revision Medium Variant Forecast

1990

2010

2030

2050

1.0

Russia

0

0 1950

Brazil China

1.0

Turkey Indonesia Mexico

1950

South Korea

0 1970

1990

2010

2030

2050

1950

1970

1990

2010

2030

2050

©2010 Stanford Center on Longevity, http://longevity.stanford.edu

Divergent work-force changes have strategic implications for economic activity. Working-Age Population

Next 11

Level

(millions) Absolute Change

2010

2010-30 2030-50

Nigeria

86.3

54.3

51.6

Pakistan

109.6

62.9

51.5

Philippines

58.3

23.6

14.9

Egypt

53.4

20.7

11.8

Bangladesh

107.2

34.9

6.8

Turkey

51.2

11.3

-0.1

Indonesia

156.4

31.8

-3.8

Iran

53.6

10.7

-2.9

Mexico

72.5

13.3

-6.3

Vietnam

61.1

10.5

-0.9

S. Korea

35.3

-3.7

-7.6

India

780.6

241.1

76.3

Brazil

132.2

18.4

-13.4

China

973.3

9.9

-113.1

Russia

101.2

-17.0

-14.2

Argentina

Large Economies Australia

26.2

4.8

1.2

14.5

1.4

1.3

U.S.

BRICs

POPULATIONS AGE SHIFTS WILL RESHAPE GLOBAL WORK FORCE

Percent Change 2010-30 2030-50

April 2010 Adele Hayutin, Ph.D. Director, Global Aging Program [email protected] Continued growth

Change in Working-Age Population, 1990-2010 Over the past 20 years, the fastest growth in working-age population occurred in Africa, the Middle East, and Asia. Worldwide, the working-age population increased by 40%, or 1.3 billion, with 95% of that growth occurring in less developed countries. Asia accounted for two-thirds of worldwide growth and Africa 20%.

Slow growth, then shrinking

Divergent patterns

Change in Working-Age Population, 1990-2010

212.3

18.1

17.5

Canada

23.6

1.0

1.6

U.K.

40.9

1.2

1.8

Spain

30.8

0.7

-4.1

Moderate Growth (25% to 50%)

France

40.5

-1.1

-1.0

Too Fast to Absorb (50% to 100%)

Netherlands

11.2

-0.7

-0.3

Dangerously Fast (> 100%)

Italy

39.3

-3.0

-5.9

Germany

54.3

-8.1

-7.4

Japan

81.6

-13.0

-16.7

Continued but slow growth

Shrinking (-25% to 0%) Slow Growth (0% to 25%)

Shrinking

Projected Change in Working-Age Population, 2010-30

-40%

-20%

0%

Definition: Working-age population = 15-64 Data Source: United Nations, World Population Prospects, The 2008 Revision Medium Variant Forecast

20%

40%

60%

©2010 Stanford Center on Longevity http://longevity.stanford.edu

Growth will slow almost everywhere. Most advanced economies face shrinking work forces, while many less developed countries face explosive growth. Europe’s working-age population is projected to decline by 10%, or nearly 50 million. Less developed countries are projected to see a work-force gain of nearly 1 billion, with about half of that occurring in Asia and nearly 40% in Africa.

The Global Aging Program at the Stanford Center on Longevity focuses on the economic and political implications of longevity. The program specifically addresses the risks and opportunities of population age shifts around the world. Understanding the implications of these changes will be critical for effective policy making. The Stanford Center on Longevity is working to transform the culture of human aging. The Center studies the nature and development of the entire human life span, looking for innovative ways to use science and technology to solve the problems of people over 50 and improve the well-being of people of all ages. To inspire change of this scale, the Center brings together the best minds in academia, business and government to target the most important challenges and solutions for older populations. The Center was founded by two of the world’s leading authorities on longevity and aging, Stanford professors Laura L. Carstensen, PhD, and Thomas Rando MD, PhD, and received its initial funding from Texas investor Richard Rainwater. Adele Hayutin, Ph.D., Senior Research Scholar and Director of SCL's Global Aging Program, is a leader in the field of comparative international demographics and population aging. Dr. Hayutin combines broad knowledge of the underlying data with the ability to translate that data into practical, easy to understand language and implications. She has developed a comparative international perspective that highlights surprising demographic differences across countries and illustrates the unexpected speed of critical demographic changes. Previously she was director of research and chief economist of the Fremont Group (formerly Bechtel Investments) where she focused on issues and trends affecting business investment strategy. Dr. Hayutin received a BA from Wellesley College and a Master's in Public Policy and a Ph.D. in economics from the University of California at Berkeley.

Change in Working-Age Population, 2010-30 Shrinking (-25% to 0%) Slow Growth (0% to 25%) Moderate Growth (25% to 50%) Too Fast to Absorb (50% to 100%)

Global Aging Program Stanford Center on Longevity 616 Serra Street, E Wing 5th Floor Stanford, CA 94305-6053 (650) 736-8643 http://longevity.stanford.edu/myworld

Dangerously Fast (> 100%) Definition: Working-age population = 15-64 Data Source: United Nations, World Population Prospects, The 2008 Revision Medium Variant Forecast ©2010 Stanford Center on Longevity, http://longevity.stanford.edu