The future of work: Meeting the global challenges of demographic change and automation

AuthorDavid E. BLOOM, Klaus PRETTNER, Eda ALGUR, Ana L. ABELIANSKY
DOIhttp://doi.org/10.1111/ilr.12168
Publication Date01 Sep 2020
Copyright © The authors 2020
Journal compilation © International Labour Organization 2020
*University of Goettingen, email: ana-lucia.abeliansky@wiwi.uni-goettingen.de. **Harvard
T.H. Chan School of Public Health, emails: edaalgur@gmail.com and dbloom@hsph.harvard.edu
(corresponding author). ***University of Hohenheim, email: klaus.prettner@uni-hohenheim.de.
Responsibility for opinions expressed in signed articles rests solely with their authors, and
publication does not constitute an endorsement by the ILO.
International Labour Review, Vol. 159 (2020), No. 3
The future of work:
Meeting the global challenges
of demographic change
and automation
Ana L. ABELIANSKY,* Eda ALGUR,
** David E. BLOOM**
and Klaus PRETTNER***
Abstract. This article explores future job creation needs under conditions of demo-
graphic, economic and technological change. The authors rst estimate the im-
plications for job creation during 2020–30 of population growth, changes in
labour force participation and the achievement of target unemployment rates, by
age and sex. Second, they analyse the job creation needs by country income group
and, lastly, examine the eects of accelerated automation. Projections indicate that
shifting demographics will account for a far greater share of the estimated global
need for 340 million jobs over 2020–30 than automation.
Keywords: future of work, global labour force, global employment needs,
demographic change, labour force participation, technological change, automation,
projection.
1. Introduction
As the ILO’s landmark report Work for a brighter future (ILO, 2019) shows, the
world of work is under transformation and many challenges lie ahead. More
and more people worldwide nd themselves in informal, precarious and non-
standard forms of employment (ILO, 2018a). Inequality is rising in most coun-
tries, widening the gap between those who benet from economic development
and those who are left behind (Atkinson, Piketty and Saez, 2011; Piketty, 2014).
Moreover, the gender wage gap remains substantial in most countries despite
decades of eorts to close it. Increasing automation is aecting not only the
number of available jobs but also the quality of existing jobs, and people’s
ability to derive meaning from their work (Brynjolfsson and McAfee, 2014;
Graeber, 2018). Lastly, global demographic changes such as population growth
International Labour Review
286
and increasing labour force participation continue to add millions of people to
the global workforce every year.1
In this article, we aim to contribute to this discussion by quantifying the chal-
lenges due to demographic shifts, changes in labour force participation and dis-
placement by industrial robots over the next decade. Providing enough jobs in
the wake of these challenges and thereby keeping unemployment in check is im-
portant not only because unemployment is a top public concern (Rikin, 2 014),
but also because the unemployed tend to be unhappier and unhealthier than
the employed. In addition, long-term unemployment is one of the main factors
driving manifest poverty. Therefore, projections of future global employment
needs due to demographic changes and technological developments are of cen-
tral importance for economists, policy-makers and the wider public.
When forecasting the job creation needs over the coming decade, we rely on
the following techniques: (i) standard demographic projections (Bloom, McKenna
and Prettner, 2019) for changes in population size, changes in labour force
participation and the eects of specic unemployment targets; (ii) extrapolations
of current trends in automation under various scenarios, combined with the es-
timated coecient for job replacement by robots taken from the contributions
by Acemoglu and Restrepo (2017a) and by Dauth et al. (2017). In our analysis,
we nd that between the years 202 0 and 2030 more than 30 0 million new jobs
will need to be created globally to accommodate an 8.9 per cent increase in the
working-age population (dened as those aged 15–64), changing labour force
participation, and eorts to improve the youth and adult unemployment rates
with target levels of 8 and 4 per cent, respectively. When we factor in the eects
of automation, the job creation needs rise to more than 340 million. Compar-
ing the relative importance of each of these factors, the projections indicate that
demographic changes will account for a far greater share of job creation needs
than automation over the coming decade.
With respect to the global distribution of job creation needs, our results show
that 98 per cent of the increase in the working-age population over 2020 –30 is
expected to occur in low- and lower-middle-income countries. However, these
countries are also becoming more vulnerable to the reshoring of production
back to richer countries (Chu, Cozzi and Furukawa, 201 3; Krenz, Prettner and
Strulik, 2018). As far as the older adult population is concerned, the largest
increases are expected in high- and upper-middle-income countries, which will
account for 6 6 per cent of the rise in the population aged 65 and above in the
2020 –30 period. This poses the challenge of creating jobs for older workers,
while ageing countries are simultaneously investing more in automation
(Abeliansky and Prettner, 2017; Acemoglu and Restrepo, 2017b and 2018a).
In terms of labour force participation, age-specic participation rates drive
overall changes, with declines in the 1 5–24 age group being a major factor. In
all, from 2020 to 2030 , labour force participation rates are set to decrease across
all age and country income groups, except among older adults in high-income
countries. Using target unemployment rates and predicted 2030 labour force
participation, we estimate that only 11 per cent of the global job creation needs
1  See, for example, https://population.un.org/wpp/Publications/ [accessed 20 April 2020].

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