5. Hong Kong is a small city with limited natural resources. The most valuable and important “resource” of the city is its human capital. The creativity and productivity of the population are integral to its economic development and vibrancy.
6. The shrinking labour force and ageing population in the coming decades are envisaged to impose much pressure on Hong Kong’s public finances. This phenomenon translates into two major consequences - reduced GDP which means lower tax revenues, and increased demands on health, welfare and other related services funded by the public purse.
For instance, the health and social welfare portfolios are estimated to constitute 15.0% and 17.3% respectively of the recurrent Government expenditure in 2006-07. Further increases in their pies would imply less resources for other essential public services.
7. To sustain the economic competitiveness of Hong Kong in the international arena, there are calls for strategic solutions to our shrinking labour force, and to the gap and mismatch between the new economic structure and the labour force. Solutions should also cater for the social needs of the population. In devising a long-term population policy that will have a bearing on our development for decades to come, we have to be visionary and allow sufficient flexibility to cope with the future changes in our society.
8. There are various approaches to expanding and prolonging the productivity of our labour force.
(1) Enhancing the capacity of the labour force
Targeting current and potential members of the labour force, we can provide suitable education and training to enhance their capacity, so that they can meet the needs of the changing economy. For instance, the upgrading of our students’ biliteracy and trilingual proficiency, as well as the broadening of their international horizon will help improve the quality of our labour force.
Hong Kong has no mandatory retirement age per se. Individual employers or institutions may work out the appropriate retirement age for their staff members. The labour force participation rates for the elderly aged 60-64 and aged 65-69 were 30.2%
and 11.9% respectively in 2005. In view of the increased life expectancy of the population and the improved productivity of older generations, we may consider advocating the extension of the population’s working life or gradually raising the retirement age.
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In view of the higher education attainment among the female population, it is imperative to utilise this hidden potential for the benefit of our community’s development. Nonetheless, given the current employment structure in Hong Kong, a portion of the female population may find it difficult to participate in the labour force while accommodating their own personal goals and family needs. Employers and the business sector in particular should consider drawing reference from overseas, where there is more willingness to offer flexible and varied employment opportunities such as part-time jobs and job sharing, to cater for individual needs and thus maximize potential labour productivity. The availability of varied job opportunities may also encourage more elderly to stay in the labour force.
22 HKSARG Census and Statistics Department, Special Topics Report No. 41: Desire of economically inactive persons for taking up jobs if being offered suitable employment, August 2005
23 HKSARG Census and Statistics Department
24 Figures excluded foreign domestic helpers. HKSARG Census and Statistics Department
Table 2.1 Hong Kong Population by Education Attainment and Sex, 1993 and 2005
24Male Female
1993 (%) 2005 (%) 1993 (%) 2005 (%) No school / Kindergarten 13.2 7.9 21.9 13.3
Primary 30.7 23.0 29.3 24.3
Lower secondary 18.5 19.0 13.7 15.5
Upper secondary 23.5 25.3 23.3 24.9
Matriculation 3.2 4.1 3.0 4.2
Tertiary : non-degree 4.6 6.8 4.9 6.3
Tertiary : degree 6.3 13.9 3.8 11.4
Total 100.0 100.0 100.0 100.0
Notes: Figures may not add up to the respective totals owing to rounding.
(2) Unleashing hidden human capital
We should not overlook the hidden human capital in our society which, if unleashed, can help expand our productive labour force.
According to a survey conducted by the Census and Statistics Department in October – December 200422, some 214 900 persons aged 15 and over were economically inactive at the time of enumeration but were willing to take up jobs if being offered suitable employment. They represented 9.6% of the total economically inactive population aged 15 and above at the time of enumeration.
Separately, the overall male labour force participation rate in the first quarter of 2006 was 71.1%, but that for female was 52.1%23 only, although the education attainment level of both the male and female populations has continued to rise.
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(3) Attracting talent
Apart from enhancing local labour productivity, another complementary solution is the attraction of talent from elsewhere. The international economy is highly globalised and interlinked. The need for quality talent is shared by all developed economies, and Hong Kong is faced with immense competition from countries and cities worldwide. Hong Kong’s ability to attract talent from the Mainland and abroad as well as to retain local talent is dependent on the variety of development opportunities and the anticipated quality of life that our city is able to provide. Only population movements that include both healthy inflows and outflows of qualified job seekers will be beneficial to the economy.
The provision of more student exchange programmes at schools and universities, and the attraction of students from the Mainland and abroad will provide additional links to young people around the world. Hopefully, this will provide them with first-hand experience with living in Hong Kong and the type of development opportunities that are available. It is also important that we are able to induce Hong Kong people trained abroad to return and contribute to their home city.
Table 2.2 Comparison with Selected Economies on Female Labour Force Participation Rates (LFPRs)(%)
25Japan USA Singapore UK Hong Kong
Age (Mar 2006) (2004) (June 2005) (Q1 2006(3)) (Q1 2006)
15-19 15.9 43.8(1) 14.4 (4) 11.6
20-24 68.6 70.5 73.6 70.7
25-29 74.5 73.1 86.6
76.1 86.2
30-34 61.8 74.0 78.6 79.3
35-39 62.8 74.5 69.9 71.6
40-44 71.1 76.7 66.1 79.1 66.6
45-49 72.1 78.2 63.6 61.7
50-54 70.1 74.5 54.0
70.1 52.1
55-59 59.0 65.0 38.0 36.4
60-64 38.5 45.4 19.6
11.3 14.7
65 and over 12.2 11.1 (2) 1.6
Overall 47.6 59.2 56.6 56.6 52.1
Notes: (1) For those aged 16-19
(2) The LFPRs for those aged 65-69, 70-74 and 75& over were 9.7, 4.2 and 1.2 respectively.
(3) Seasonally adjusted figures
(4) The LFPRs for those aged 16-17 and 18-24 were 48.7 and 69.8 respectively.
25 HKSARG Census and Statistics Department