SINGAPORE’S ratio of working-age residents to elderly residents has nearly halved in the last decade, meaning a higher tax burden on workers – but foreign workforce growth has helped to relieve the pressure, a Ministry of Manpower (MOM) report showed on Thursday (Nov 28).
In 2014, for every resident aged 65 and above, there were six residents aged 20 to 64. This old-age support ratio has fallen to 3.5 in 2024, and is expected to drop to 2.7 by 2030.
However, including foreign workers improves the ratio across the years, raising it to 5.2 in 2024. This offers “some relief to the economic pressures of an ageing population”, said the report.
Manpower Minister Tan See Leng said at a media briefing that the government will continue to support seniors to remain in the workforce, if they wish to.
“But for us to maintain support for our ageing population, we have to take a practical and also a very pragmatic approach, and we have to remain open to complementary foreign workers,” he said.
Asked if there was an ideal rate of foreign workforce growth to reach a particular old-age support ratio, Dr Tan replied that there is no prescribed formula or ratio, as it is also a function of economic demand.
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Annual data on the old-age support ratio, with and without foreign workers, was revealed for the first time in MOM’s latest Labour Force in Singapore Advance Release, which also included statistics on income, employment and unemployment.
Without the foreign workforce, the burden of supporting the elderly – in the form of higher taxes – would fall mainly on the resident workforce, Ang Boon Heng, director of manpower research and statistics, MOM, said at a separate briefing.
He added that MOM’s focus is on bringing in “quality foreign workers” who can complement the local workforce, rather than replacing it.
Ageing workforce
Singapore’s ageing population has already been taking a toll on labour participation. The overall labour force participation rate declined for the third consecutive year, to 68.2 per cent in 2024.
“While participation rose in most age groups, the growing share of seniors, who have lower participation rates, contributed to this decline,” the report said.
This is even as more seniors are working longer. Over the last decade, the largest increase in labour force participation was observed among seniors aged 65 to 74 years.
More than half of those aged 65 to 69 are in the labour force, up from 41.2 per cent a decade ago. For those aged 70 to 74, the participation rate has risen to 35 per cent, from 25.7 per cent in 2014.
In contrast, the participation rate of youths aged 20 to 24 years declined over the decade, to 54.3 per cent from 61.8 per cent before. But this was because more of them were pursuing further studies and delaying their entry into the workforce, said MOM.
This was based on respondents’ answers to MOM’s surveys, with an increasing number of young people saying they wanted to continue studying rather than enter the workforce.
Dr Tan noted that the government is supporting companies to “prolong the longevity of the workforce”, through reskilling and training programmes; career conversion pathways; and grants to boost productivity or redesign jobs to reduce physically taxing work.
Tripartite guidelines on flexible work arrangement requests will also come into effect this Sunday.
Asked if Singapore plans to encourage flexi-work more strongly, as more companies worldwide mandate a return to the office, Dr Tan said the government’s focus is on broadening companies’ mindsets rather than imposing any prescriptive measures.
He noted that there are 260,000 women who are not in the workforce, as well as more than 120,000 mature workers who may be looking for a more “leisurely type of activity” but are still willing to contribute.
“Not all kinds of work requires you to be in the office nine to six, five days a week,” he said. “If you can have a very innovative, creative way of rationalising that work, you could tap on about 400,000 Singapore residents out there who hitherto till now, we have not been able to leverage.”
