Singapore's Ageing Population: The Domino Effect of Declining Fertility and Rising Life Expectancy

For years, Singapore's ageing population has been a recurring example in my data workshops, illustrating how demographic shifts drive long-term societal and economic challenges. This issue stems from two critical factors: declining fertility rates and increasing life expectancy. While Singapore has managed these challenges well so far, the recent announcement that the Singapore Civil Defence Force (SCDF) is considering hiring foreigners for Emergency Medical Services (EMS) roles is a stark reminder that these demographic forces are gaining momentum.

The Numbers Tell a Clear Story

Singapore's fertility rate hit a record low of 0.95 in 2024, far below the replacement rate of 2.1. This makes Singapore’s fertility rate the third lowest globally and among the bottom 5% of high-income countries. No racial group—Chinese, Malay, or Indian—is replacing itself, which raises significant implications for Singapore’s race-based policies. Meanwhile, Singaporeans enjoy one of the longest life expectancies worldwide, meaning many will need to support themselves for 15-20 years post-retirement, with the last 8-10 years often spent in disability or chronic ill health.

The combination of these factors means that more people are leaving the workforce each year than entering it, leading to several pressing challenges for Singapore’s future.

The Implications of a Shrinking Workforce

While many Singaporeans believe that the government has effectively managed these issues in the past, the structural demographic shift we are witnessing is unlike any before. Without intervention, the consequences could be severe:

1. Not Enough National Servicemen

   • With fewer young men entering the workforce, there will be a shortage of NS enlistees to sustain Singapore’s military, police, and civil defence forces.

   • This could lead to longer NS terms or reduced operational readiness, forcing Singapore to explore alternative solutions, including increased automation or hiring foreign personnel, as seen in the SCDF’s recent move.

     

     
     

2. A Heavy Retirement Burden on the Economy

   • As more people retire, Singapore's tax revenue from income tax shrinks, while the need for healthcare, pensions, and eldercare rises.

   • The strain on the CPF system and public healthcare subsidies will intensify, requiring either higher taxes, later retirement ages, or significant policy shifts.

3. Changing Employment Dynamics

   • Singapore’s employment laws restrict certain jobs, particularly in government roles, to Singaporeans and PRs.

   • This could create a polarized job market where high-paying and low-paying private-sector jobs go to foreigners, while Singaporeans are largely confined to jobs that favour citizens.

   • If unaddressed, this could lead to wage stagnation, limited career progression, and talent drain among Singaporeans.

Is This the First Domino to Fall?

The SCDF’s move to recruit foreigners for EMS roles may be just the beginning of a larger trend. If the workforce continues to shrink, more industries—beyond healthcare and emergency services—may struggle to find local talent, forcing policy changes to allow foreign professionals to fill these gaps.

Singapore has successfully navigated complex challenges before, but reversing demographic trends is notoriously difficult. Countries like Japan and South Korea, which face similar ageing populations, have struggled to boost fertility rates despite numerous incentives.

If Singapore does not find a way to turn this around, we may see more dominoes fall, with further policy shifts in areas like national service, employment laws, and immigration policies. The question is not whether change will come, but whether Singapore can adapt proactively rather than reactively to these inevitable shifts.

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A Call for Solutions

While the government has introduced policies to encourage marriage, parenthood, and longer working lives, more bold and innovative solutions may be necessary, such as:

• Redefining Work and Retirement: Encouraging phased retirement, flexible work arrangements for older workers, and retraining programs.

• Immigration Policy Adjustments: Strategic immigration policies to balance workforce needs while maintaining social harmony.

• Encouraging Parenthood: Enhancing work-life balance policies, childcare support, and cost-of-living initiatives.

The road ahead will not be easy, but the demographic clock is ticking. The real question is whether Singapore will act decisively before the next domino falls; data will help to find options and measure the effectiveness of outcomes.