Singaporeans in their 40s better educated, earn more than past cohorts

The median real gross monthly income of those in their 40s is twice that of those in their 60s, when that cohort was still in their 40s.
The median real gross monthly income of those in their 40s is twice that of those in their 60s, when that cohort was still in their 40s.PHOTO: BUSINESS TIMES

But MOF report shows they have less family support as fewer are married and families are smaller

Singaporeans today are generally better educated, more able to find jobs and earn more, and live longer, according to a study by the Ministry of Finance (MOF).

The study looked at Singaporeans in their 40s today, and compared them with earlier cohorts.

It found that those in their 40s also have less family support, as fewer of them are married and families are smaller, the report published yesterday showed.

And while home ownership has risen over time, it showed that the figures for those in their 40s are slightly behind that of those in their 50s and 60s.

The study, which draws on official data, tracks the status of four generations of Singaporeans when they were in their 40s.

It shows that 44 per cent of those born in the 1970s have university degrees, compared with 21 per cent of those born in the 1960s, and 7 per cent of those born in the 1940s.

The median real gross monthly income of those in their 40s is twice that of those in their 60s, when that cohort was still in their 40s.

And the median real balance in their Central Provident Fund (CPF) Ordinary and Special accounts is three times that of those in their 60s at the same age, after accounting for inflation.

Singaporeans in their 20s and 30s are not included in the report as outcomes like retirement savings and health are better observed later on in life, said MOF.

INCOME, EDUCATION, CPF SAVINGS

The report highlighted that 79 per cent of Singaporeans in their 40s have post-secondary qualifications, compared with 49 cent of those in their 50s and 22 per cent of those in their 70s.

IMPROVED EDUCATION SYSTEM

Today, students benefit from well-resourced schools and a large degree of flexibility... where they can choose from multiple pathways based on their strengths and talents.

REPORT BY THE MINISTRY OF FINANCE

 
 
 
 

One factor is that those born in the 1940s grew up in a fragmented schooling landscape with uneven quality organised by different community groups. While vocational schools expanded in the 1960s and 1970s, it was not until the 1980s that a robust national curriculum was developed.

Those in their 40s benefited from major shifts in the education system focusing on technological literacy and continuing skills development - a trend set to continue with younger Singaporeans.

The report added: "Today, students benefit from well-resourced schools and a large degree of flexibility... where they can choose from multiple pathways based on their strengths and talents."

Due to an increase in the female participation rate, more are now active in the workforce. While the total labour force participation rate rose by 5 percentage points between 2009 and last year, women's participation jumped by more than 10 points during the same period.

Singaporeans in their 40s are also earning more. At $5,900, the median real gross monthly income including employer CPF contributions of all full-time workers is about twice that of older cohorts when they were at the same age. The median is the midway point in the population. This applies even to the bottom 20 per cent of income earners, who earn $3,000 or less a month - twice as much as those in their 60s, when they were in their 40s.

Overall, when shorn of inflation's effects, the median CPF account balance of those in their 40s is three times that of those in their 60s, when that cohort was still in their 40s.

HOME OWNERSHIP

Some 82 per cent of citizens in their 40s own at least one property.

This is 3 percentage points to 5 percentage points lower than those in their 50s and 60s, but higher than the 76 per cent ownership rate of those in their 70s.

 
 

Someone in his 40s who lives with his parents in a parent-owned home would not be considered as a property owner unless he has another property elsewhere.

"As (those in) this generation are only in their 40s, they still have many opportunities to purchase a residential property, especially given their higher CPF balances," said an MOF spokesman. "They also have more years to remain in the workforce and earn more and save more."

The report stated that most Housing Board dwellers have leases that are long enough to cover them until at least age 95. They have an asset that can be monetised if necessary to supplement their retirement needs, for example, by right-sizing.

HEALTH AND SUPPORT

Singaporeans are healthier and living longer too. At age 45, those in their 40s can expect to live another 41 years, compared with an average of 37 years for older cohorts.

 
 
 

Adjusting for the amount of time lived in less-than-perfect health, each cohort can still expect to live for one to three more years in good health, compared with each previous older cohort.

However, subsequent generations of Singaporeans may have to get used to receiving less support from their immediate family. This is due to lower marriage rates and smaller family sizes, said the report.

The percentage of "ever-married" women - those who are married, widowed, divorced or separated - has declined steadily from a high of 92 per cent among those in their 70s to 82 per cent of women in their 40s.

The number of children per woman dipped to 1.8 last year, compared with between two and 2.5 children for older cohorts.

The report acknowledged that with reduced family support, the Government will have to work with community partners to support those who need additional assistance, and adapt its policies in line with a maturing economy and society.

A version of this article appeared in the print edition of The Straits Times on October 23, 2019, with the headline 'S'poreans in their 40s better educated, earn more than past cohorts'. Print Edition | Subscribe