MOM: Labour force participation rate drops for 3rd consecutive year due to Singapore’s ageing population

SINGAPORE: The Ministry of Manpower’s (MOM) Labour Force in Singapore Advance Release 2024 revealed that Singapore’s labour force participation rate has continued its gradual decline, attributing this trend to the nation’s ageing population.

Released on Thursday (28 November), the report examined key trends in employment, income, and unemployment, shedding light on both the challenges and opportunities facing Singapore’s workforce.

Report: Singapore’s labour force participation rate declined further due to ageing

The proportion of residents aged 15 and older who are working or actively seeking work fell to 68.2 per cent this year, down from 68.6 per cent in 2023 and 70 per cent in 2022.

This marks a consistent decrease from the 70.5 per cent recorded in 2021.

MOM attributes this trend primarily to the nation’s ageing population.

While participation rates among younger age groups have risen, the overall figure is dragged down by lower participation among seniors.

For instance, only 50.5 per cent of those aged 65 to 69 are engaged in the labour force, compared with 94.1 per cent of residents aged 30 to 34.

Despite the decline, MOM noted that Singapore’s senior labour force participation remains relatively high compared to other major cities.

Seniors aged 60 and above now account for 18.9 per cent of the workforce, surpassing the 14.6 per cent represented by residents under 30 years old.

The report noted that over the last decade, the labour force participation rate rose across most age groups, with the largest increases observed among seniors aged 65 to 69 years and 70 to 74 years.

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The ageing population has also impacted Singapore’s old-age support ratio. In 2014, there were six residents aged 20 to 64 for every senior aged 65 and above.

This year, the ratio has dropped to 3.5, and projections indicate it will decline further to 2.7 by 2030.

MOM highlighted the importance of foreign workers in mitigating the effects of this demographic shift.

“If we include foreign workers, the old-age support ratio rises to five,” the ministry said, emphasising the necessity of remaining open to foreign manpower to sustain the ageing population.

Improved senior employment rate

The report also highlighted an improvement in the employment rate for seniors aged 65 and over, which rose to 31.7% in 2024, following declines in the previous two years.

More seniors are being employed across various industries, particularly in Administrative & Support Services, Food & Beverage Services, and Transportation & Storage—sectors that typically hire less-educated seniors.

However, with future senior cohorts expected to be better educated, they are likely to be employed in higher-growth industries, MOM said.

Progress in employing persons with disabilities

Separately, the employment rate of persons with disabilities aged 15 to 64 has shown steady growth, reaching 33.6 per cent this year, up from 32.7 per cent in 2023 and 28.2 per cent in 2019.

This improvement reflects government efforts such as the Enabling Employment Credit and the Open Door Programme, which aim to boost employment opportunities and achieve a 40 per cent employment rate for persons with disabilities by 2030.

Re-employment struggles for older workers

Despite government efforts to improve seniors’ employability, elderly workers continue to face significant challenges in securing employment.

A major barrier remains age discrimination, with many employers holding biases against older workers. This has led to many complaints regarding ageism in the workplace.

The government announced in March 2024 that statutory protections for workers wishing to continue working will be extended, with Singapore’s retirement age rising from 63 to 64 on 1 July 2026.

This is part of a broader initiative to raise the retirement age to 65 by 2030 gradually.

Similarly, the re-employment age will increase from 68 to 69, and companies will be required to offer re-employment to eligible employees until that age or provide employment assistance if re-employment is not feasible.

By 2030, one in four Singaporeans will be aged 65 or above, and the country currently has the third-highest employment rate for workers aged 65 to 69 among Organisation for Economic Cooperation and Development (OECD) countries.

Age discrimination is not a new issue.

Between 2018 and 2022, age bias accounted for 24% of the 315 discrimination complaints filed with the Tripartite Alliance for Fair and Progressive Employment Practices and the Ministry of Manpower.

Public attitudes also contribute to the problem. A poll of 1,052 people in Singapore found that only 63% felt their workplaces valued employees of all ages.

Older workers are often perceived as less technologically adept, more expensive to hire, less productive, and more likely to take healthcare-related leave, all of which exacerbate the challenges they face in the job market.