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Market take

Playing demographic divergence now

Apr 8, 2024
Jean Boivin from BlackRock Investment Institute discusses the impact of demographic shifts on markets. He explores challenges faced by developed countries with aging populations and highlights the benefits for emerging markets like India and Mexico. Boivin also emphasizes the advantages of automation in boosting productivity, particularly in sectors like healthcare.
04:45

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Quick takeaways

  • Adaptations in workforce composition mitigate effects of aging population in developed markets.
  • Investing in sectors aligned with changing spending patterns can yield higher returns in emerging markets.

Deep dives

Impact of Demographic Shifts on Developed Markets

The demographic mega force is causing significant structural changes across developed markets, with a decline in the number of people of working ages. This trend is leading to slower economic growth, higher inflation, and increased debt due to healthcare and pension spending. Countries like Japan have mitigated this impact by boosting female labor force participation rates. However, efforts to offset working-age population declines, such as immigration surges, might not fully compensate. Adaptations including more foreign workers, women, and older individuals in the workforce aim to alleviate some effects of aging but anticipate slower growth in developed markets.

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