VietNamNet Bridge – The population aged 23 to 53 has labour income higher than consumption, which creates savings that can be ploughed back into the economy and thereby stimulate economic growth.

Illustrative image -- File photo

This was one of the key findings of the study "Impact of changes in population age structure on Viet Nam's economic growth and policy recommendations" which was presented at a conference held in Ha Noi yesterday, Nov 23.

The study was undertaken by the Viet Nam Institute for Development Strategies (VIDS) under the Ministry of Planning and Investment (MPI) as part of an United Nations Population Fund (UNFPA)-funded project.

The study was conducted based on Viet Nam's population in the period of 1979-2014, and the expected population between 2014 and 2049.

The study also found out that if the contribution of labour in the total added value, or total labour income, rose by 1.28 per cent per year during the period 2016 to 2049, the period of population dividend shall last until 2042.

Estimations based on provincial data showed that if the working age population increased by 1 per cent, gross domestic product (GDP) growth rate would be up by 0.5 per cent.

If labour productivity was not increased, changes in population age structure towards ageing would reduce the GDP per capita growth rate, especially from 2017 onward, according to the study.

Associate professor Giang Thanh Long, director of the Institute of Public Policy and Management under the National Economics University, head of the study group, said that labour productivity growth and job creation for all working age groups should be the most important direction for further promoting the positive impact of population age structural changes on economic growth.

Long proposed that the Government needed to have appropriate policies to fully utilise the old people with working capacity in order to increase their income and decrease deficit as much as possible.

"Vocational training and career guidance should be provided to young people so that they are geared towards competitive industries and occupations that will create sustainable jobs in the context of increasingly intensive and extensive international integration," he said.

Ritsu Nacken, UNFPA Acting Representative in Viet Nam, said that Viet Nam had been experiencing a profound population transition over the last decades. The country has entered a period of a demographic window of opportunity with a large young labour force while at the same time it is in the stage of ageing population.

"Demographic opportunity can create a turning point for the country to boost its economy rapidly and contribute to the implementation of its long term socio-economic development targets," she said.

"Viet Nam needs to plan to respond to the challenges that are derived from the rapid population ageing now, before it becomes too late. Increasing retirement age is one option to reduce the inter-generational deficit coming from population ageing," she said.

VNS