1. ER S T E G R O UP
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Global Challenges:
Ageing and potentially shrinking
labour forces
Rainer Münz
Erste Group
IFA 11th Global Conference on Ageing
Prague, May 29, 2012
Rainer Münz Page 1 May 29, 2012

2. ER S T E G R O UP
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Global demographic trends
Rainer Münz Page 2 May 29, 2012

3. ER S T E G R O UP
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20th Century
Rainer Münz Page 3 May 29, 2012

4. ER S T E G R O UP
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21st Century
Rainer Münz Page 4 May 29, 2012

5. ER S T E G R O UP
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Reality no. 1:
Growing world population
Rainer Münz Page 5 May 29, 2012

6. ER S T E G R O UP
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Rainer Münz Page 6 May 29, 2012

7. From 6 billion to 7 billion people:
Contribution per continent to ER S T E G R O UP
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earth’s 7th billion
Asia Africa Latin America North America Europe Oceania
Rainer Münz Page 7 May 29, 2012

8. Total Population change by Major 3
Area,1950-2100 ER S T E G R O UP
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Source: UN, 2010
Rainer Münz Page 8 May 29, 2012

9. … Europe’s, Russia’s and Japan’s
populations have already started to shrink ER S T E G R O UP
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Projected population growth, 2010-2050, in %
to -20 %
-20% - -5%
-5% - 0%
0% - 25%
25% - 75%
75% - 100%
100% - 150%
150% - 200%
above 200%
n. a.
Source: Berlin Institute 2010
Rainer Münz Page 9 May 29, 2012

10. Some Regions of Europe have the
most rapidly shrinking populations ER S T E G R O UP
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Projected population change 2010-2030, in %
Source: Berlin Institute 2010
Rainer Münz Page 10 May 29, 2012

11. ER S T E G R O UP
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Reality no. 2:
Global ageing
Rainer Münz Page 11 May 29, 2012

12. Demographic ageing is a global phenomenon
Total Population change age groups 0-19 vs 50+, 1950-2100
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Age 0-19 Age 50+
Source: UN, 2010
Rainer Münz Page 12 May 29, 2012

13. Europe is continuously getting older
ER S T E G R O UP
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100
90
80
70
60
Alter
Age
50 2050
40 2010
30 1950
20
10
0
1.00 0.75 0.50 0.25 0.00 0.25 0.50 0.75 1.00
Men (2010) in % Women (2010)
Men (2050) Women (2050)
Source: Eurostat, Europop 2008
Rainer Münz Page 13 May 29, 2012

14. ER S T E G R O UP
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… and driven by two trends
Rainer Münz Page 14 May 29, 2012

15. ER S T E G R O UP
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Rainer Münz Page 15 May 29, 2012

16. During the last six decades, global life
expectancy has increased by 20 years ER S T E G R O UP
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Life expectancy by world regions, 1950-2015
80
70
60
50
Africa
Asia
Europe
40 Latin America
North America
Oceania
World
30
1950-1955 1970-1975 1990-1995 2010-2015
Source: UNPD 2011
Rainer Münz Page 16 May 29, 2012

17. ER S T E G R O UP
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Rainer Münz Page 17 May 29, 2012

18. In the same period, the overall number of
children per woman has halved ER S T E G R O UP
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Total fertility by world regions, 1950-2015
7 Africa
Asia
Europe
6 Latin America
North America
Oceania
5 World
4
3
2
1
0
1950-1955 1970-1975 1990-1995 2010-2015
Source: UNPD 2011
Rainer Münz Page 18 May 29, 2012

19. Today 50% of humanity live in societies with
less than 2 children per family ER S T E G R O UP
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World population by Total Fertility, 1950-2100
Population in million
Source: UN, 2010
Rainer Münz Page 19 May 29, 2012

20. ER S T E G R O UP
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… however, demographic
ageing is not affecting all
regions the same way
Rainer Münz Page 20 May 29, 2012

21. Europe and Japan have the oldest
populations ER S T E G R O UP
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Share of age group 65+ in total population
n. a.
to 3%
3% - 6%
6% - 9%
9% - 12%
12% - 15%
above 15%
Source: UNPop Div 2011
Rainer Münz Page 21 May 29, 2012

22. The demographic development of the richer world is
in a very advanced stage: Countries with a ER S T E G R O UP
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stagnating or shrinking native population account
for four-fifth of world economy
China
France
Indonesia Russia
Brazil
Slowly growing Germany
population India Egypt
USA
Low life expectancy,
Italy
high fertility
Nigeria
Japan
South
Africa
Stagnating population
Chad
High life expectancy,
Ethiopia low fertility
Niger Shrinking population
Ageing society
Fast growing population
Increasing life expectancy,
gradually sinking fertility
Rainer Münz Page 22 May 29, 2012

23. ER S T E G R O UP
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What challenges is the
rich world facing due to
demographic trends?
Rainer Münz Page 23 May 29, 2012

24. ER S T E G R O UP
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Challenge no. 1:
Aging and eventually
shrinking labour forces
Rainer Münz Page 24 May 29, 2012

25. Demographic trends affect labour
supply highly differently ER S T E G R O UP
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Development of labour force until 2020 (in %)
below -5%
-5% - 0%
0% - 10%
10%- 20%
Source: based on ILO data 2011 above 20%
Rainer Münz Page 25 May 29, 2012

26. In some developed countries working-age
populations have already started to shrink
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Working-age population, in million
Source: The Economist 2012
Rainer Münz Page 26 May 29, 2012

27. ER S T E G R O UP
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What can we do?
Rainer Münz Page 27 May 29, 2012

28. ER S T E G R O UP
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Work 10 years longer
than today
Rainer Münz Page 28 May 29, 2012

29. Therefore, labour force participation rate of
the age group 55-64 needs to be increased ER S T E G R O UP
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Labour force participation rate of the age group 55-64, 2010
79,8
70,5
68,0 68,6
65,2
60,3
57,6 57,7
56,2 56,8 57,1
53,7 53,8
50,0
48,2 48,6 49,2
46,3 46,5
43,5 43,6
41,1 42,3 42,4
39,6 39,7 40,5
36,6 37,3 37,6
34,0 34,2 34,4 35,0
29,6 30,2
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
EU countries
Non EU countries
Source: Eurostat 2012 EU-27 average
an
Rainer Münz Page 29 May 29, 2012

30. ER S T E G R O UP
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Rainer Münz Page 30 May 29, 2012

31. Working longer is an option, but employing
the elderly needs adaptation in several areas ER S T E G R O UP
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New pension system
Lifelong learning
New salary system
Rainer Münz Page 31 May 29, 2012

32. … even if such measures are not
cheered by parts of the electorate ER S T E G R O UP
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Rainer Münz Page 32 May 29, 2012

33. ER S T E G R O UP
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Increase female
labour force
participation
Rainer Münz Page 33 May 29, 2012

34. ER S T E G R O UP
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Increase labour
productivity
Rainer Münz Page 34 May 29, 2012

35. ER S T E G R O UP
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Bring in more
migrants
Rainer Münz Page 35 May 29, 2012

36. Migration helps reducing the pace
of demographic ageing ER S T E G R O UP
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EU-27, age structure of population and of immigrants
Median EU-27: 40.6 years
Median Immigrants: 28.4 years
Source: Eurostat, 2010.
Rainer Münz Page 36 May 29, 2012

37. The challenge is to attract the right skills
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Rainer Münz Page 37 May 29, 2012

38. … via smart migration policies?
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Rainer Münz Page 38 May 29, 2012

39. The US more easily of education by talent and skills
Figure 7c: Migrants' level attracts generation and
Immigrants of birthcountry of residence - 2001 the US, Canada, Italy
cohorts 1935-1975 in ER S T E G R O UP
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and Spain by average years of schooling
17,0
Average number of years of schooling
15,0
13,0
US*
Canada
11,0
Italy
Spain*
9,0
7,0
5,0
1930 1940 1950 1960 1970 1980
Year of birth
Source: Fargues 2010
Rainer Münz Page 39 May 29, 2012

40. ER S T E G R O UP
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Tomorrow, the developed
world will compete for
workforce, especially for
young and skilled migrants
Rainer Münz Page 40 May 29, 2012

41. ...but today, the problem
seems to be another one ER S T E G R O UP
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Youth unemployment (age 15-24, in %)
Source: OECD
Rainer Münz Page 41 May 29, 2012

42. ER S T E G R O UP
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None of the mentioned
strategies alone is
enough to overcome the
ageing problem, but their
combination might do it
Rainer Münz Page 42 May 29, 2012

43. ER S T E G R O UP
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All strategies are highly
unpopular in Europe, but
much less so in the US
and Canada
Rainer Münz Page 43 May 29, 2012

44. ER S T E G R O UP
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Challenge no. 2:
Integration within
increasingly diverse
societies
Rainer Münz Page 44 May 29, 2012

45. How to encourage integration?
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Rainer Münz Page 45 May 29, 2012

46. How to deal with ethnic, cultural
and religious diversity? ER S T E G R O UP
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Rainer Münz Page 46 May 29, 2012

47. If you want to know more ER S T E G R O UP
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Overcrowded World?
Global Population and
International Migration
Haus Publishing
ISBN: 978-1-906598-10-5
€ 9.95; $14.95, £ 9.90
Rainer Münz Page 47 May 29, 2012

48. ER S T E G R O UP
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Thank you for your attention!
rainer.muenz@erstegroup.com
Rainer Münz Page 48 May 29, 2012