How ageing populations are fuelling emigration and complicating other issues in Jamaica
LESS than a century ago, in 1925 to be exact, the average life expectancy in the United States of America was a mere 58.2 years. Meaning, that if you lived into your 60s, you could have counted yourself among the fortunate. Since then, medical advancements and improved living standards have resulted in life expectancy in the US increasing dramatically to 78.9 years as of 2020. This isn’t an isolated phenomenon. Around the world, people are enjoying much longer life expectancy than ever before in history, especially in developed countries. However, while this is certainly a positive thing, it also brings along with it a particular set of challenges as well as results in problems for the developing world.
Before we address those, however, it is important to highlight another phenomenon which has been developing concurrently with increasing life expectancies. This is, of course, the fact that birth rates worldwide have been steadily declining for decades, especially in developed countries. According to the World Bank, in 2020, the world’s fertility rate was 2.3 births per woman, which, thankfully, is still slightly above the replacement level (the fertility rate which allows for one generation to replace itself) of 2.1 births per woman. However, most developed countries are below their replacement levels of fertility, with the US at 1.64, the UK at 1.56 and Canada at 1.4 as of 2020. With citizens living longer than ever before and fewer people being born, these countries face the reality of an ageing population.
One critical challenge which arises from an ageing population is an ageing workforce. As people eventually retire and leave the workforce, the size of the labour force shrinks. Not only can this have direct negative effects, such as a decrease in productivity and lower economic growth, it also leads to less obvious strains on society. These include an increase in health care costs, a greater demand for health care workers and other social service providers, and increased pressure on the pension system. Addressing these challenges can be a complex matter, sometimes requiring governments to be bold and dynamic in their policy decisions. However, truth be told, some (generally rich) countries have tried to “fix” these problems with a relatively simple solution — immigration.
Historically, it has not been very difficult for rich nations to attract (highly) skilled migrants from poorer nations with the promise of a better life. Many skilled Jamaicans, for example, have made use of this opportunity over the years, with well over a million Jamaican-born individuals currently residing abroad. According to the World Bank, as of 2020, 71 per cent of emigrants from Jamaica settle in the United States, with Canada (13 per cent) and the UK (12 per cent) being the next two preferred destinations. This outflow of labour dates back to the late 19th century, with no signs of stopping any time soon, and why should it? After all, some would say this has been a win-win-win situation for all parties involved: Jamaicans are able to find better employment opportunities, host countries are able to fill their workforce gaps, and Jamaica receives a substantial influx of remittances, which, according to the Bank of Jamaica, now accounts for more than 20 per cent of annual gross domestic product (GDP). But, of course, like anything else, these perceived benefits do come at a cost.
The discussion of the ill effects of emigration in Jamaica often centres on ‘brain drain’, where the most highly trained and qualified individuals from one country (usually the less developed) emigrate to another, usually in search of better wages, higher education, or improved living conditions. In Jamaica’s case, some of our most qualified professionals in the fields of health care, education, and construction are emigrating each year due to a variety of economic, social and environmental factors. According to the United States Agency for International Development, about 50 per cent of the doctors and two-thirds of all the nurses who would have been trained in Jamaica in the last 30 years have left the country. While it may seem as if Jamaica has been able to withstand the loss of these professionals the data does not support this. In fact, we have been operating short-handed for quite some time as, according to World Bank data, our ratio of 0.9 nurses per 1,000 people is well below the WHO-recommended ratio of 3 nurses per 1,000 people.
The less discussed matter associated with our emigration issue is that Jamaica is currently facing some of the same challenges that developed countries have attempted to address with immigration. Our population is growing older, and our birth rate is on the decline. According to data from the World Bank, Jamaica’s life expectancy has increased from 64.8 years in 1960 to 74.5 years in 2020. Over that same period, our birth rate has fallen from 5.5 births per woman to only 1.4 births per woman, comparable to Canada. However, unlike Canada and other rich countries, we do not have the resources to attract highly skilled migrant labour on a large scale to supplement our dwindling skilled workforce. We, therefore, must find innovative ways to address what can be deemed as an existential threat to our society.
When considering potential solutions, the Government must do so with the long term in mind, attacking the issues from multiple fronts and with varying strategies. Some strategies which have been tested and adopted elsewhere and could prove helpful to Jamaica include:
• Implementing policies that support families, like paid parental leave, affordable childcare, and financial incentives to have more children. Promoting a better work-life balance can also contribute to creating a favourable environment for family planning. Efforts made by the Government to introduce paternity leave for public sector workers during the current public sector compensation review and steps taken by some private sector employers are helpful.
• Investing in education, training, and job placement programmes for young people can help mitigate the long-term effects of demographic shifts by ensuring a well-prepared, productive workforce.
• Encouraging lifelong learning and re-skilling can help older individuals to remain in the workforce longer.
• Promoting flexible work arrangements, like part-time work or telecommuting, can also help retain older workers in the workforce and address labour shortages.
• Investing in health care, particularly investing even more in preventive care, as this will ensure that individuals remain healthy and active for longer and reduce the need for expensive and invasive medical treatments later in life.
One policy which has been contemplated by many countries (including Jamaica) is raising the retirement age. The appeal of implementing such a policy is understandable as it allows for a larger working population which would help to address potential labour shortages. It would also help to maintain the financial sustainability of pension systems by reducing the duration of pension payouts and increasing the period of contributions. On the flip side, however, many workers plan their lives and finances around the expectation of retiring at a certain age and raising the retirement age can disrupt these plans, causing distress, especially for individuals who have physically demanding jobs. Additionally, raising the retirement age could lead to higher unemployment among younger workers. As older workers stay in the workforce longer, there may be fewer jobs available for younger workers. This could exacerbate the unemployment problem among young people, especially those who are just entering the workforce. All these factors make it a complex and nuanced policy issue that any government must consider carefully.
In navigating the intricate web of these demographic issues, Jamaica must not only take steps to preserve its cultural identity, but also adapt and innovate to secure its future. The challenges are substantial, but with foresight, determination, and creative solutions, Jamaica can rise to meet them.
Jahmar Brown is a senior research analyst at JN Fund Managers whose primary areas of focus are equities, fixed income, and market insights. He also takes an interest in global geopolitics and geoeconomics which informs his outlook on local affairs.