In the World Economic Outlook Report, the International Monetary Fund (IMF) provides compelling insights. It encourages young people to migrate from low-income countries to advanced economies, aging, and balances global labor supply.
Increased life expectancy and lower fertility rates have altered the demographic structure of senior and stronger emerging markets.
Since the turn of the century, the old age dependence ratio in these countries has risen dramatically. This has increased from 20 elderly people per 100 working age to 50, which is projected by 2050.
This means that by the middle of the century, one person will be over 65 years old for every two working age.
In contrast, many low-income countries experience opposite demographic phenomena: young people bulging.
These countries are in the early stages of population change, characterized by high birth rates and large batches of young people entering the workforce.
However, this young enthusiasm is frequently suppressed by structural barriers. Many young people find it difficult to find meaningful or safe jobs due to high levels of informal employment, poor labor markets and minimal social protection measures.
IMF's Win-Win Demographic Solution
The IMF proposes a powerful solution. It redirects teenage labor from low-income countries to advanced economies with aging populations. Facilitated transitions could be a type of reallocation of global resources that serve both ends of the demographic spectrum.
“This imbalance in labor supply between youth and youth-rich countries could be partially alleviated by the flow of refugees to young immigrants and aging countries,” a recent IMF report states.
“This global resource reallocation can simultaneously alleviate economic pressures from a smaller workforce in the destination economy and a lack of opportunities for the origin economy,” he adds.
Of course, intentional and coordinated measures are required to realize this vision.
The destination must establish an immigration policy that integrates young immigrants into the labor market and society.
At the same time, countries of origin should manage their transitions in ways that encourage long-term development, such as education, training, and reintegration programs for returnees.
“However, these potential benefits in the world of asynchronous aging in market-based matches between the skills of young immigrants and the youth-intensive comparative benefits of destination economies.
Transition policies may support or interfere with the redistribution of young workers by affecting the ability of individuals to move to countries where skills are most needed,” the report states.
In an age of rising global interconnections and demographic dependence, transitions can be viewed as strategic opportunities rather than risk.
