Low birth rates threaten young people’s professional lives: they will face longer hours, later retirements, according to a new report from the McKinsey Institute.
A demographic crisis caused by declining birth rates and an aging population threatens to reshape the world’s workforce, warns a report from the McKinsey Global Institute.
Younger generations are expected to face increasing pressures, including longer working hours, later retirements and greater productivity demandsas various nations grapple with the economic consequences of a dwindling workforce.
“In the absence of measures, young people will inherit lower economic growth and will bear the cost of a greater number of retirees“, warns the report on Wednesday, which describes a demographic time bomb.
McKinsey presents solutions such as increasing workforce participation, extending working hours and increasing productivity. Another suggested approach is to prolong working life to maintain economic balance.
The report estimates, for example, that German workers would need to add 5.2 hours to their weekly schedules to maintain living standards at levels seen since the 1990s, if labor force participation rates remain unchanged.
Historically, economic growth has depended on contributions from working-age populations, who also bear the cost of supporting older generations. However, as birth rates fall and life expectancy rises, this balance is becoming increasingly unstable, especially in advanced economies, the report notes.
Two-thirds of humanity lives in countries with a fertility below the replacement rate of 2.1 children per family. By 2100, the populations of some major economies will decline by 20 to 50 percent, according to United Nations calculations.
