1Q26_ Quarterly Outlook Report_Final_EN - Flipbook - Page 40
T H E P LUMB LI N E | A RETU RN TO F I RS T PRI N CI PL ES
Labour supply is structurally shrinking as median age rises, and birth and migration rates fall
60%
60
50
40%
40
20%
30
20
1950
1980
2010
2040
2070
2100
0%
1950
1980
Age 25-64
Median age
2010
2040
2070
Age 0-24
2100
Age 65+
Forecast
0.06
0.25
0.04
0.2
0.15
0.02
0.1
0
0.05
-0.02
1950
1980
2010
2040
Net Migration Rate
2070
2100
0
1950
1980
Forecast
2010
2040
Crude Birth Rate
2070
2100
Forecast
Source: UN World Population Prospects (2024). All charts are for “high income countries,” except for net migration rate which is for the U.S.
Japan offers a preview of what these factors could mean. Over the past 25 years, Japan’s median
population age has risen by roughly ten years, while the share of the working-age population has
declined by about five percentage points. Over the same period, trend GDP growth has been
modestly negative, lagging other developed economies such as the United States, Canada, the
euro area, and the United Kingdom.
The share of working age population is expected to decline as median age rises
60
60%
50
55%
40
50%
30
45%
20
40%
10
0
35%
1950
1980
2010
2040
Share of working age population (25-64) - LHS
2070
2100
Median age - RHS
Source: UN World Population Prospects (2024)
Against this backdrop, AI has the potential to act as a partial solution. By augmenting workers
and automating specific tasks, AI can raise output per worker as labour becomes increasingly
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