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

2. Page 2May 29, 2012Rainer Münz E R S T E G R O U P B A N K A G Global demographic trends

3. Page 3May 29, 2012Rainer Münz E R S T E G R O U P B A N K A G 20th Century

4. Page 4May 29, 2012Rainer Münz E R S T E G R O U P B A N K A G 21st Century

5. Page 5May 29, 2012Rainer Münz E R S T E G R O U P B A N K A G Reality no. 1: Growing world population

6. Page 6May 29, 2012Rainer Münz E R S T E G R O U P B A N K A G

7. Page 7May 29, 2012Rainer Münz E R S T E G R O U P B A N K A G From 6 billion to 7 billion people: Contribution per continent to earth’s 7th billion AsiaAfricaLatin AmericaNorth AmericaEuropeOceania

8. Page 8May 29, 2012Rainer Münz E R S T E G R O U P B A N K A G 3 Total Population change by Major Area,1950-2100 Source: UN, 2010

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

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

11. Page 11May 29, 2012Rainer Münz E R S T E G R O U P B A N K A G Reality no. 2: Global ageing

12. Page 12May 29, 2012Rainer Münz E R S T E G R O U P B A N K A G Demographic ageing is a global phenomenon Total Population change age groups 0-19 vs 50+, 1950-2100 Source: UN, 2010 Age 0-19Age 50+

13. Page 13May 29, 2012Rainer Münz E R S T E G R O U P B A N K A G Europe is continuously getting older Source: Eurostat, Europop 2008 1950 2010 2050 Age

14. Page 14May 29, 2012Rainer Münz E R S T E G R O U P B A N K A G … and driven by two trends

15. Page 15May 29, 2012Rainer Münz E R S T E G R O U P B A N K A G

16. Page 16May 29, 2012Rainer Münz E R S T E G R O U P B A N K A G Source: UNPD 2011 During the last six decades, global life expectancy has increased by 20 years Life expectancy by world regions, 1950-2015

17. Page 17May 29, 2012Rainer Münz E R S T E G R O U P B A N K A G

18. Page 18May 29, 2012Rainer Münz E R S T E G R O U P B A N K A G In the same period, the overall number of children per woman has halved Total fertility by world regions, 1950-2015 Source: UNPD 2011

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

20. Page 20May 29, 2012Rainer Münz E R S T E G R O U P B A N K A G … however, demographic ageing is not affecting all regions the same way

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

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

23. Page 23May 29, 2012Rainer Münz E R S T E G R O U P B A N K A G What challenges is the rich world facing due to demographic trends?

24. Page 24May 29, 2012Rainer Münz E R S T E G R O U P B A N K A G Challenge no. 1: Aging and eventually shrinking labour forces

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

26. Page 26May 29, 2012Rainer Münz E R S T E G R O U P B A N K A G In some developed countries working-age populations have already started to shrink Working-age population, in million Source: The Economist 2012

27. Page 27May 29, 2012Rainer Münz E R S T E G R O U P B A N K A G What can we do?

28. Page 28May 29, 2012Rainer Münz E R S T E G R O U P B A N K A G Work 10 years longer than today

29. Page 29May 29, 2012Rainer Münz E R S T E G R O U P B A N K A G an Therefore, labour force participation rate of the age group 55-64 needs to be increased Labour force participation rate of the age group 55-64, 2010 Source: Eurostat 2012 EU-27 average Non EU countries EU countries

30. Page 30May 29, 2012Rainer Münz E R S T E G R O U P B A N K A G

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

32. Page 32May 29, 2012Rainer Münz E R S T E G R O U P B A N K A G … even if such measures are not cheered by parts of the electorate

33. Page 33May 29, 2012Rainer Münz E R S T E G R O U P B A N K A G Increase female labour force participation

34. Page 34May 29, 2012Rainer Münz E R S T E G R O U P B A N K A G Increase labour productivity

35. Page 35May 29, 2012Rainer Münz E R S T E G R O U P B A N K A G Bring in more migrants

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

37. Page 37May 29, 2012Rainer Münz E R S T E G R O U P B A N K A G The challenge is to attract the right skills

38. Page 38May 29, 2012Rainer Münz E R S T E G R O U P B A N K A G … via smart migration policies?

39. Page 39May 29, 2012Rainer Münz E R S T E G R O U P B A N K A G Source: Fargues 2010 The US more easily attracts talent and skills Immigrants of birth cohorts 1935-1975 in the US, Canada, Italy and Spain by average years of schooling

40. Page 40May 29, 2012Rainer Münz E R S T E G R O U P B A N K A G Tomorrow, the developed world will compete for workforce, especially for young and skilled migrants

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

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

43. Page 43May 29, 2012Rainer Münz E R S T E G R O U P B A N K A G All strategies are highly unpopular in Europe, but much less so in the US and Canada

44. Page 44May 29, 2012Rainer Münz E R S T E G R O U P B A N K A G Challenge no. 2: Integration within increasingly diverse societies

45. Page 45May 29, 2012Rainer Münz E R S T E G R O U P B A N K A G How to encourage integration?

46. Page 46May 29, 2012Rainer Münz E R S T E G R O U P B A N K A G How to deal with ethnic, cultural and religious diversity?

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

48. Page 48May 29, 2012Rainer Münz E R S T E G R O U P B A N K A G Thank you for your attention! rainer.muenz@erstegroup.com