IMPACT OF AGEING WORKFORCE ON SINGAPORE'S PRODUCTIVITY GROWTH

Abstract

This study examines the effect of aging on productivity performance of Singapore and its manufacturing and service sectors. It provides estimates and analysis on productivity growth with respect to age. The effect of education is also considered at the aggregate level. This is to examine the productivity performance of a better-educated but aging workforce. The relationship between age and productivity is rarely studied. Although there are a few studies in North America and Europe on the above issue, the present study is the first attempt to provide any quantitative results. The methodology adopted is based on the conventional neoclassical growth accounting framework. The study is organized in the following manner. The introductory chapter attempts to draw the link between age and productivity given the structural changes in Singapore. Chapter two presents an explanation of the methodology adopted. Chapter three and four analyses the productivity results at the aggregate and sectoral level respectively. The concluding chapter draws together the findings of the present study and examines briefly their policy implications. This study found a positive relationship between age and productivity level before the age of 50 years. Contributions to productivity growth is increasing for older workers but falling for the younger workers. The results also show that older workers aged 50 years and above are more productive in the service sector. This implies the feasibility of absorbing this group of workers into the service sector so that productivity growth in the manufacturing sector will not be too adversely affected.