Future of Work: 65+ Age Bracket Drive Labour Force Growth in India and China

While millennials are increasingly dominating the global workforce, Euromonitor International’s Labour Force Dynamics Vis App, available on the Business Dynamics Page, illustrates that a significant part of the growth in the labour force in India and China, two very popular investment destinations, between 2000 and 2015 was driven by population aged 65+. This indicates that there are likely implications for entrepreneurs on the expected level of productivity and how they would need to manage the workforce going forward.

Business people reviewing paperwork 1

Chart 1: Overview of Labour Market Dynamics in India and China: 2000

Economically active population

Source: Euromonitor International from International Labour Organisation/Eurostat/national statistics

Chart 2: Overview of Labour Market Dynamics in India and China: 2015

Economically active population 2

Source: Euromonitor International from International Labour Organisation/Eurostat/national statistics

65+ age bracket drive growth in the labour force for both India and China

Both China and India have seen a significant growth in the 65+ age bracket enter the workforce, but the proportionate representation of this growth as part of the total growth was higher in China while India experienced a greater absolute growth:

  • The total number of economically active population in India in 2000 was 398 million and in 2015 this grew to 522 million, representing an absolute growth of 124 million;
  • The economically active population in China in 2000 was 740 million while in 2015 this figure rose to 800 million, equalling a growth of 60 million;
  • The number of economically active people aged 65 and above in India was 6.2 million while for China it was 20.9 million in 2000 as shown by the top bar in Chart 1;
  • Chart 2 illustrates that the number of economically active men and women, aged 65 and above, rose to 35.6 million in India, while for China it rose to 42.7 million in 2015;
  • The absolute growth in the economically active population aged 65+ in India was 29.4 million and in China it equalled 21.8 million;
  • The growth in the 65+ age bracket as a percentage of the total growth in the economically active population equalled 23.8% in India and 36.5% in China.

Older population (65+) more in China than in India

Elderly people entering the workforce is likely to continue in both India and China:

  • A look at the Future Demographics Model on the Populations Page in Economies and Consumers comparing India and China (Chart 3), reveals that China‘s population is ageing faster than India‘s. This helps to explain the larger concentration of the growth in the 65+ age bracket as a percentageof the total growth in the economically active population in China, although the strong growth inIndia‘s 65+ entering the worforce cannot be ignored;
  • The model further reveals that China‘s ageing population will continue, which could indicate that the concentration of the older population as a part of the total workforce is likely to grow. On the other hand, India‘s larger youth means that its older population will not carry a similar weight to China‘s older population as a percentage of the total workforce, but a lack of effective social security schemes is compelling elderly people in India to enter the workforce and the figure could be high well into the future unless major reforms are made in India‘s social security system.

Chart 3 Future Demographics Model for India and China

Future Demographics Model for India and China

Source: Euromonitor International from national statistics/UN

Future implications for businesses

If this trend continues, employers in both nations may be faced with declining labour productivity as the older population will need to be retrained with the necessary work and technology skills. Furthermore, labour costs for employers in India and China could be expected to rise as employers may have to pay more for healthcare provisions of older workers.