Singapore Population Funnel

Singapore recently released its annual population statistics, and while the headline highlighted a modest 0.7% growth in the citizen population to 3.64 million, the real story is a demographic shift formation of what can be called the "Population Funnel."

What is the Population Funnel?

Imagine a funnel with a wide top and narrowing Bottom. When the population distribution by age resembles a funnel shape, with a wide top (older people) and a narrow base (young people), it is a Population Funnel.

Widening Top: For the first time in Singapore’s history, there are more people aged 65 and above than those aged 19 and younger. By 2030, this gap will widen further, highlighting a significant shift in the age distribution. The number of citizens aged 80 and above also increased by about 65%, from 85,000 in 2014 to 142,000 in 2024. The two charts below explain the trend.

Narrowing Bottom: At the bottom of the funnel, the resident total fertility rate (TFR) reached a historic low of 0.97 in 2023, with a similar trend over the long term. The average number of births per year in the last five years (31,100) was also lower than in the preceding five years (33,000).

Economic Impact

This ageing trend means a heavier burden on a shrinking workforce, creating economic and social challenges.

Traditionally, the economically active population aged 20-64 is the group that supports the older generation. This group is shrinking in Singapore, dropping from 64.8% in 2014 to 60.4% in 2024. What is worrying is the projections that indicate that by 2030, only 50% of Singapore’s population will be economically active, further intensifying the challenge of supporting a growing elderly population.

With a declining birth rate, fewer people will enter the workforce, raising policymakers' concerns about sustaining economic growth in the new paradigm.?

Balancing the Population Funnel: three possible solutions can be considered to address the Population Funnel.?

• First, the elderly could take on more economic responsibility by continuing to work past the traditional retirement age.
• Alternatively, external support could be provided through policies that could support a society with fewer young people supporting a larger elderly population.?
• A third desirable solution could be a combination of the two.?

Singapore has started working on the third option using a holistic approach. On 4 March 2024, it was announced that the retirement age in Singapore would be raised to 64 while the re-employment age in Singapore would be raised to 69 in 2026. Currently, the retirement age is 63, while the re-employment age is 68.?It developed an awareness program and massive investment in skilling and reskilling.

It created a benchmark for developing a world-class city and International Financial Centre. It will be interesting to see if it can also replicate its success with the Longevity Economy.?

How old is Old??

Conventional wisdom suggests that people aged 65 and above should retire. However, with longer life expectancy and healthy ageing, it may be time to rethink this approach. Historically, the retirement age of 65 was not based on scientific reasoning but on political circumstances.

Dr. Joe Coughlin writes in his pathbreaking book on Longevity called "The Longevity Economy", which everyone should read, share a very interesting anecdote: "One pervasive myth regarding how we came to see 65 as the age to stop working dates the turning point to 1875 when German Chancellor Ottovaon Bismarck created the world’s first nationwide old-age social insurance program in an attempt to diminish pressure from leftist agitators. Bismarck supposedly decided on age 65 as the plan’s trigger because that was his age at the time, and the rest of the world followed suit."