Demographics, employment and the global economy

Introduction

The population makeup of any place has a direct effect on job opportunities and state of the economy. Demographics often differ from place to place. While some countries are made up of predominantly older people, other places have a vibrant youth population. To properly understand how regional economies fare and the job market situations, studying key elements of each demographics is very important.

This article reviews key elements of the worlds population as featured in a recent ILO statistics document. The goal is to highlight how population elements affect the state of employment and potential for economic growth of various regions of the world.

Developing economies and youth

The study looks at the demographics of the world based on social status or income potential. It discovered that most developing economies boast a large figure of youth population - vibrant population of young people that are of employment age and ready to add value to the economy. This youth population under the right circumstances and opportunities could become invaluable human resources to drive economic growth. But glaring challenges prevent them from reaching their full potential. Going specific into their age group, here is what the document says:

Persons under 25 represent a whopping 61 per cent of the population in low-income countries source

Saying it in other words, the stat above indicates that more than half of the population in many developing economies are made up of people 25 years or younger. One might just wonder why this huge and vibrant human resources are not fully utilized to grow the economy of these regions.

Challenges and Realities: There are glaring issues that prevent a vibrant, youthful population from becoming a formidable driver of economic growth. One of the identified challenge is lack of standard education or professional training. Illiteracy remains a huge problem among youths in developing economies. A good number of these youths do not have access to standard basic education. This is especially so for those that are living in rural areas or those that come from poor families. As such, they can only settle for menial work often in the informal sector.

Climbing up the education ladder, there are some youths that did attain both basic and advanced education. A sizeable number completed their university education. However, the quality of tertiary education is often not of international standard. Thus when they graduate, they find the labor market highly competitive and out of touch for their chosen career. Basically, they lack the technical skills and professional knowledge needed to excel in their sector. Such youths would end up getting employed in the informal sector or settling for a job with poor remuneration.

Another identified challenge for youth population in developing economies is lack of employment opportunities from the government. This is often true when you look at the unemployment rates in developing economies. Even when some youths are technically ready and academically qualified to hold down a high-paying job, the absence of such work opportunities remain a glaring problem. As a result, youths in such places might spend years looking for jobs that are non-existent. And after many years of fruitless job-hunting, they might settle for whatever might help them put food on the table.

So policy makers in developing economies need to address glaring issues that prevents the youth population from contributing optimally to the economy. Grassroot education should be standardized, available and affordable. And the government need to create more job opportunities so that these teeming youths could be absorbed into some well-paying jobs and add value to the society and economy at large.

Developed economies and aging

Check out the chat below contained in the [ILO] referenced heavily in this material. Did you notice that developed economies are grappling with a bigger population of older persons?

From ILOstat

So while developing economies are battling a huge youth population that lack social instruments to thrive, developed economies are managing a large aging population. The largest population age range as seen above falls between 25 years and 64 years.

Challenges and Realities: One of the main challenges of having many older persons in the population is the balance of labor force participation. Basically, as more people grow older at the same time, it could lead to more people retiring based on age and leaving the workforce. In order for the labor force participation across the ages to remain at equilibrium, there should be more younger number of people entering the workforce. This is not happening in some of the countries included in the report and it remains a challenge. Eventually, there will be shortage of workers when the number entering the work force is significantly lower than those that are exiting it. Some countries in Europe and Asia are already facing this unfortunate situation.

Developed economies do not battle so much with what happens to people after the leave the labor market. There are advanced social protection for after-work years. For example, a good number of older people are receiving their post-work benefits as shown below by this stat:

97.5 per cent of persons above retirement age were receiving a pension in 2020 in high-income countries source

Having more older people in the demographics also presents another challenge - skills. The job environment is ever-evolving as new technologies emerge. For example, the surging rise of artificial intelligence in the work environment requires people already in jobs to acquire those skills. For the older population in the workforce, it might prove to be a huge challenge. Such older workers might be at home with with skills and intellect they acquired years ago which the evolving job market are quickly ditching. The lack of modern skills by older people can thus lead to reduced input on the job - and consequently reduced economic impact.

Finally

From the discussion above, there should be a good balance of demographics in every workforce. The right number of older people and a good mix of younger people for advanced economies. Low-income countries need to tap into their youth population to enhance swift economic growth. They need to create more jobs and improve the education systems. Demographics thus have a direct bearing on the labor force, regional and global economies of the world.

Note: thumbnail is from pixabay

Posted Using InLeo Alpha