What is in this article?:
- Demography is destiny as global workforce swells
- China, India, U.S.
- About two-thirds of the world's population, or 4.6 billion people in total, are of working age in 2011, the highest share in the last 60 years.
- Important implications for the world economy.
- In 2010, the number of unemployed people in the world reached 205 million.
The rising size of the global workforce presents an opportunity to drive economic expansion and increase gross domestic product (GDP), but it also presents many challenges, according to new research by the Worldwatch Institute for Vital Signs Online. About two-thirds of the world's population, or 4.6 billion people in total, are of working age in 2011, the highest share in the last 60 years. The United Nations projects that the potential labor force will continue to grow through the second half of the century.
"This development will have important implications for the world economy," said Elizabeth Leahy Madsen, an independent consultant who conducted the research for Worldwatch. "Many developing countries will face the challenge of expanding their labor markets to provide jobs for a growing workforce. Meanwhile, industrialized countries will face important policy decisions about productivity in an aging workforce and about their openness to migration."
Industrialized countries are home to only some 16 percent of the world's potential labor force, but they produce more than two-thirds of global GDP, according to Madsen. Meanwhile, nearly a quarter of the world's potential labor force lives in South Asia, yet that region's share of the global economy is a little over 3 percent. The potential labor force in developing countries is projected to grow by an average of 39 percent within the next 40 years.
"A vital labor force is an asset, but when its proportion is too high relative to the rest of the population, low wages and unemployment become a risk," said Robert Engelman, president of Worldwatch. "Innovative governments and societies can mitigate that risk by fostering sustainable jobs that offer good wages and working conditions. This is easier to accomplish where rights-based population policies encourage balanced age distributions, and where sound health and education policies improve employment potential."
In 2010, the number of unemployed people in the world reached 205 million, a global unemployment rate of about 6 percent. Poor job prospects in developing countries often trigger migration among rapidly growing working-age populations as people search for work in other countries. International migrants account for 10 percent of the total population of industrial countries, which have seen a 55 percent increase in the number of migrants since 1990.
The age structure of a country's labor force depends primarily on the fertility rate followed by the rate of migration. While the decline in fertility rates is leading to an aging population in industrial countries, inward migration can have a mitigating effect on this development. Madsen analyzes the different patterns of change in the potential work force for different countries as follows: