Global growth will slow because the working age population in some of the key centres for economic activity is falling, say Barclays.
However, Barclays’ Michael Gavin also highlighted in a research note this week about how women are replacing men economically and this is a good thing.
In some cases, like in Japan, Barclays said that by having more women and old people entering the workforce, it is helping mitigate some of the economic damage from dwindling labour market participation from men:
The working age population of the existing centres of global economic activity has stopped rising and begun to fall. All else equal (including in particular productivity growth and labour force participation), the implied slowdown in the global labour force could subtract a full percentage point from trend growth in the coming decade and a half, compared with the past 15 years.
But the effect of shrinking (and ageing) populations on the global workforce could be mitigated by labour force participation of workers beyond the conventional working age (15-64) and by increased participation rates of the working age population. In the past decade, precisely this has happened in Japan and Germany, substantially mitigating the demographic shock.
Take a look at these charts. Effectively, more women of the “prime working age” bracket are joining the labour market, while more men in this category are leaving it. This in turn is helping stop the “demographic shock” that Barclays is talking about: