The ‘factory of the world’, China, will have difficulty finding workers in the foreseeable future. And Poland and Bulgaria, currently suppliers of personnel to Western European construction sites, will soon have a shortage of construction workers themselves for the same reason. This also has consequences for prosperity in the Netherlands, and it is important to respond to this now. The Scientific Council for Government Policy reports this a report published on Tuesday.
The Dutch economy is strongly intertwined with other countries. Many products come from China, many workers from Eastern Europe. However, the proportion of people from those areas who can potentially work – the WRR calculates – will shrink relatively significantly in the coming decades. This makes products more expensive and migrant workers dry up.
should now focus attention on countries where the working population will increase, says the WRR. Over the next ten to twenty years, this will be the case in India and Indonesia, among others, and eventually in Nigeria and other sub-Saharan African countries.
“,” says Gijsbert Werner, senior researcher at the WRR and project leader of the study. “We know for sure that these demographic shifts will take place, simply because we already know what the labor supply will be by mid-century. Almost all people who will enter the labor market until 2050 have already been born. And we know that figures on fertility and mortality do not change from one year to the next.”
In China, where many of our products are made, there are expected to be 300 million fewer working-age people by 2050.
The Netherlands is now aging. To what extent is the pattern you outline for Eastern Europe and China already visible?
“You wouldn’t know it if you listen to the public debate about migration here, but labor migration from Eastern European countries is already declining significantly. Migration from Poland in particular has decreased enormously in the last three years, and more people are actually returning to Poland than coming here. Unemployment is low there, prosperity is increasing. The large migration flows from Central and Eastern Europe have passed, and they are not coming back.
“We know from research by the State Commission on Demographic Development that the need for labor migration in the Netherlands continues to exist. This must therefore come from outside the EU. This is also an opportunity, because labor migration from outside the EU can be better regulated with visas, for example. This is not possible with migration from within the EU.
“This is also a story about trade; it is strongly linked to employment in countries themselves. In China, where many of our products are made, there are expected to be 300 million fewer people of working age in 2050. That is about the same as the current labor potential of the EU. Global production is already shifting as a result. It is important to respond with policy so that countries with a growing working population can make an industrialization leap and take over the production function.”
Residents of the Flevoflat play a game of racing ball. Amsterdam has an increasing number of elderly people who are getting older.
Photo Ramon from Flymen
You assume that in countries where the working population grows proportionately, prosperity also increases. How certain is that?
“If we look at history, a relatively large working population is usually associated with prosperity. Countries can then make use of what we call the demographic dividend: many people are able to work, there are few elderly people who need care and also relatively few small children. At that stage it is easier to invest in human capital, such as education.
“To capitalize on this momentum, good governance, good infrastructure and good care are needed. If these things are not arranged, the situation can actually worsen. Then there are too few opportunities and that leads to frustration. It is therefore also in our interest to continue investing in development.”
In which countries will this ‘demographic dividend’ grow?
“First in South and Southeast Asia, India is now entering a period of demographic dividend: the working population there will reach a peak in the next ten to fifteen years.
“Enormous growth in the working population is also expected in Sub-Saharan Africa, but it will take some time before the share of the working population there is high enough to speak of a demographic dividend. Nigeria is important in terms of population growth, but the share of young people there is now very high. Only when the number of children per woman decreases there will there be a demographic dividend. That will be the case in the second half of this century.”
In the past, major changes that had been known for decades were often not properly addressed. Take climate change, the overcrowded power grid and the teacher shortage. Can the Netherlands do this?
“The Netherlands and Europe must be careful not to become too inward-looking. This report is really intended as a call to the government: include foreign demography in plans for the Netherlands. It would be good if Europe started working on trade agreements and the Netherlands with trade missions. Invest in countries where there are demographic opportunities. China is doing that in abundance in Africa, we can do that too, but policy must be drawn up for that.”
Globally and in the Netherlands, cuts are being made to development aid. So that’s a short-sighted policy?
“It would be wise to invest in development aid. That is important for the people there, but it is also really important for us because they are our trading partners of the future. Countries that are at the beginning of their transition must be able to benefit from that demographic dividend.”
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