The workforce in 2050 will look very different from that of today, as aging continues and working-age populations start to shrink. In an era of such profound demographic change, a productivity revolution becomes a necessity. Can automation boost workers’ productivity, especially for those in the ranks of the elderly? Does the way we currently measure output and productivity truly capture the “new economy” and how the younger, tech-savvy generations work? How can companies leverage technology and a “more experienced” workforce? Can innovation, family, and immigration policies help? Join us in seeking answers to these questions and exploring policy options to address the challenges posed by demographic changes around the world
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Jared Bernstein, Senior Fellow, Center on Budget and Policy Priorities
Jared Bernstein joined the Center on Budget and Policy Priorities in May 2011 as a Senior Fellow. From 2009 to 2011, he was the Chief Economist and Economic Adviser to Vice President Biden, Executive Director of the White House Task Force on the Middle Class, and a member of President Obama's economic team. He holds a PhD in social welfare from Columbia University.
David Canning, Professor, Harvard University
David Canning is the Richard Saltonstall Professor of Population Sciences and Professor of Economics and International Health in the Harvard School of Public Health. He also serves as the Deputy Director of the Program on the Global Demography of Aging. His research focuses on the effect of demographic changes on economic behavior, and explores health as a form of human capital and its effect on worker productivity. He holds a PhD in economics from Cambridge University.
Catherine L. Mann, OECD Chief Economist and Head of the Economics Department
Catherine L. Mann is OECD Chief Economist and Head of the Economics Department since October 2014. She also serves as the OECD Representative at the Deputies’ meetings of the G20 Finance Track. Before joining the OECD, she was the Rosenberg Professor of Global Finance at Brandeis University. Earlier in her career, she worked at the White House, the World Bank, and the Federal Reserve Board. She holds a PhD in economics from MIT.
Yasuyuki Sawada, Chief Economist, ADB
Yasuyuki Sawada is ADB Chief Economist and Head of Economic Research and Regional Cooperation Department. Before assuming this post, he was a professor at the University of Tokyo’s Graduate School of Economics. He also worked at the ADB Institute in Tokyo and Stanford Center for International Development, and served as a consultant for various projects at the World Bank Group. He earned a PhD in economics at Stanford University.
Hal R. Varian, Chief Economist, Google Inc.
Hal R. Varian is the Chief Economist at Google. He is also an emeritus professor at the University of California, Berkeley. He taught at MIT, Stanford, Oxford, Michigan and other universities around the world. He is also a fellow of the Guggenheim Foundation, the Econometric Society, and the American Academy of Arts and Sciences. He received his SB degree from MIT and his MA in mathematics and PhD in economics from UC Berkeley.
Panelists discussed what the workforce will look like in 2050 as aging continues and working‑age populations start to shrink. In an era of such profound demographic change, a productivity revolution becomes a necessity. Can automation, technology and the policies on immigration be leveraged to address challenges posed by demographic changes?
Key Points:
- Productivity slowdown. Mann noted that OECD firm‑level studies show that the productivity gap between top performing “leader” firms (with high paid work force) and laggard firms (with lower paid workers) has widened, suggesting diffusion of productivity enhancing technologies is an issue. Improving diffusion will require policies aimed at enhancing competition, labor market flexibility, and the effectiveness of the financial sector. Varian took the view that the productivity enhancing impact of new technologies has not yet been fully realized because of the after effects of the global financial crisis. Noting potential benefits favorable demographics, Canning, Varian expressed optimism regarding the prospects for productivity growth in Sub‑Saharan Africa.
- Population aging. Canning noted that there are more mechanisms to address the demographic challenges associated with aging populations compared with very young populations, such as saving and working longer. Sawada noted that technology can be leveraged to offset the impact of aging, for instance by helping people experiencing physical decline stay in the workforce longer. Mann underscored the need to also address institutional constraints preventing people from working longer (e.g., pension policies).
- Productivity versus welfare. Canning cautioned against placing too much emphasis on GDP per capita and productivity as other welfare enhancing trends like improved health outcomes are not captured in these metrics. Sawada thought the link between GDP and welfare depends on the context, noting there may be a stronger correlation in low income countries.
- Measurement issues. Varian noted that global supply chains complicate the measurement of productivity since it is more difficult to determine where goods are being produced. Additionally, increased digitalization of the economy means some goods are no longer sold and therefore not measured in output (e.g. photos and other free digital goods).
- Female labor force participation. Panelists stressed the importance of supporting female labor force participation and women’s economic empowerment. Citing recent policy initiatives in Singapore, Canning stressed that only expanding maternity leave may reinforce gender norms. Paternity leave should also be part of the policy approach.
- Education. Panelists emphasized the importance of education and lifelong learning. Varian noted that new technology such as YouTube is an easy way to provide education when it is most needed. Canning noted that education can improve health outcomes.
Quotes:
“Is demographics destiny? The answer is no. Demographics is amenable to policy. For example, childcare gets women into the labor force and enhances the number of hours they work. Policies that affect the demographic transition can be large enough to actually offset what would be these very negative effect on potential outputs through the channel of labor supply.” Catherine L. Mann, OECD Chief Economist and Head of the Economics Department
“Money is not the metric of human welfare. Money is a portion of what we do in the economy.” David Canning, Professor, Harvard University
“A lot of the forces that we have seen driving inequality for the last 20 years, I think are going to reverse for the next 20 years.” Hal R. Varian, Chief Economist, Google Inc.
“New types of technology can be used to complement physical decline in aging population.” Yasuyuki Sawada, Chief Economist, ADB