Population, manufacturing jobs shrinking in advanced economies – IMF

WASHINGTON, Population growth in advanced economies is “slowing,” life expectancy is “rising” and the number of elderly people is “soaring,” a report showed Monday.

The International Monetary Fund (IMF) stressed “because older workers participate less in the labor market, the aging of the population could slow growth and, in many cases, threaten the sustainability of social security systems.” It noted that “there is considerable scope for policies to mitigate the forces of aging by enabling those who are willing to work to do so.” It indicated that in the past decade, population aging “accelerated significantly in almost all advanced economies.” It added that “even though aging is already exerting pressure on the supply of labor, there are considerable differences in the evolution and composition of aggregate labor force participation rates in advanced economies.

“More recently, participation has picked up considerably among older workers, while it has fallen among the young,” it indicated.

It affirmed that “unless technological progress delivers offsetting productivity gains, many advanced economies may need to rethink immigration policies to boost their labor supply, alongside policies to encourage older workers to postpone retirement.

“Although receiving migrants can pose challenges for host countries, any efforts to curb international migration would further worsen demographic pressures,” according to the IMF.

Meanwhile, the IMF also noted that “manufacturing jobs are waning,” where in many emerging market and developing economies, “workers are shifting from agriculture to services, bypassing the manufacturing sector.” It added that “in advanced economies, the rise in service sector employment typically reflects the outright disappearance of manufacturing jobs.” Furthermore, the IMF stated that “the spread of knowledge and technology across borders has intensified because of globalization,” where in emerging markets “the transfer of technology has helped to boost innovation and productivity even in the recent period of weak global productivity growth.

“Globalization brings a key benefit – it stimulates the spread of knowledge and technology, helping spread growth potential across countries. But interconnectedness per se is not enough,” it stressed.

It noted that “the assimilation of foreign knowledge and the capacity to build on it most often requires scientific and engineering know-how,” as “investments in education, human capital, and domestic research and development are thus essential to build the capacity to absorb and efficiently use foreign knowledge.

Source: Kuwait News Agency