Their Global monitoring report 2015/15, published yesterday, said the world was undergoing a major population shift that would be a permanent feature of the global economy.
However, the right polices could offer a path to ending extreme poverty and promoting shared prosperity.
Although this posed many fundamental challenges, World Bank president Jim Yong Kim said using the right polices nationally and internationally could be the “engine of economic growth”.
“If countries with ageing populations can create a path for refugees and migrants to participate in the economy, everyone benefits,” Kim said.
“Most of the evidence suggests that migrants will work hard and contribute more in taxes than they consume in social services.”
Many migrants and refugees are fleeing conflict, instability and shrinking opportunities. Recently, Europe has been struggling to cope with the influx of migrants and refugees from Africa and the Middle East.
More than 90% of global poverty is concentrated in lower-income countries that expect to see their working-age populations grow significantly.
At the same time three-quarters of global growth is generated in higher-income countries, but with fewer people of working age, and rising numbers of the elderly.
IMF managing director Christine Lagarde said: “The demographic developments analysed in the report will pose fundamental challenges for policy-makers across the world in the years ahead.
“Whether it be the implications of steadily aging populations, the actions needed to benefit from a demographic dividend, the handling of migration flows—these issues will be at the centre of national policy debates and of the international dialogue on how best to cooperate in handling these pressures.”
The report suggested that at country level, governments with a greater number of young people can maximise the benefits of demography by investing in health and education to boost the skills and future job prospects of their youth. While countries with ageing populations should consolidate their economic gains by boosting productivity and strengthening social safety nets and other welfare systems to protect the elderly.
At the global level, freer cross-border flows of trade, investment, and people can help manage demographic imbalances.
Although low-income countries can expect to see the largest growth in their working age populations, many of these countries are held back by conflict and fragility, putting these gains at risk.
