That is shown by the blue line which is shooting up quite nicely. But crucially a recovery in the TFR will not have any perceptible impact on labour force and GDP growth until nearly 2040. This is shown by the yellow line. It will take time for the extra babies born in the next 15 years to start entering the labour force. So while it’s the most lasting solution to our challenges, TFR effects will only impact the economy in the long run. 6 / 17  BIS central bankers' speeches  The second way to soften the trilemma is to increase our resident Labour Force Participation Rate (LFPR). This will have more immediate payoffs. But even at plausible stretch targets, its effects on resident labour force growth will be quite limited. Singapore’s LFPR – defined as share of the resident population aged 15-64 who are in the labour force – is currently 76.1. It is not bad by OECD standards but there is scope to improve it. Japan is at 76.8; Germany is at 77.9; the Netherlands is at 79.9; Sweden is at 82.1. Our LFPR for older workers is not bad; it is female LFPR where we are lagging behind. There is currently still a fairly large gender LFPR gap between male and females in their 40s and 50s. This gap in Singapore is higher than that in leading OECD countries. In many advanced economies, women tend to return to the work force after their prime child-bearing years.
London has averaged 3.3% annual growth since the financial crisis while Sydney has averaged around 2.9%. San Jose (which encompasses Silicon Valley) has averaged 2.7% p.a. It is hard to imagine a dynamic city growing at less than 2% or worse still, 1.5%. It will be unattractive to investors and talent, including the city’s own investors and talented people. A reasonably good rate of growth helps to create opportunities and preserve a sense of progress and hope, particularly among the young. It will also facilitate upward social mobility. 11 / 17  BIS central bankers' speeches  The experience of other leading cities suggests that demographics is not destiny. Yes, vibrant cities do attract people – and their additions to the labour force add to growth. But the main source of their growth and dynamism is not headcount but productivity. This is not an in-depth study but it appears that about two-thirds of overall GDP growth in the cities shown is due to productivity improvements. In comparison, productivity has accounted for about half of Singapore’s GDP growth. There is clearly scope for us to do better and thereby sustain our dynamism. How can we do this? 12 / 17  BIS central bankers' speeches  First, Singapore has scope to reap the human capital dividends that are arising from the continuous investments we have made in education and training in past decades. As recently as 2000, 45% of the resident workforce had below secondary school education, and only 12% had university education.