Comments on Workers’ Party Paper “A Dynamic Population for a Sustainable Singapore”
Summary of Analysis
Several key underlying assumptions in the population projections adopted by the Workers’ Party (WP) are different from the Government’s.
One of the main differences is that the WP assumes a higher mortality rate and lower life expectancy of the citizen population, which could underestimate both the size of the population and the number of elderly in the population. This would have implications on the dependency ratio as well as social and health services needed. If a realistic adjustment is applied to the WP’s projections, the WP’s total population projection of 5.6m to 5.8m will increase by more than 200,000 and go beyond 6.0m in 2030.
The WP’s assumptions on labour force participation rates (LFPR) are much higher than that achieved by advanced developed economies with the highest LFPR today, and may not have taken into account the effects of our ageing population on LFPR. There may be a need to make up for a 100,000 shortfall in the workforce if the WP’s projected LFPR is not achieved.
The WP could have underestimated the economic impact of their proposal to freeze the foreign workforce growth. They project a 0.5% per year difference in GDP growth between their proposal and the Government’s. Abruptly closing off foreign worker inflows could disrupt the economy. The net result could be much lower productivity and GDP growth than that assumed. The risk of a contracting economy is much higher and this could impact wage growth and job opportunities.
Until our TFR improves significantly, the immigration rate of 10,000 SC per year proposed by the WP does not replace the citizen population, and will result in a decline in the citizen population from 2030.