Who will keep Malaysia’s economy running 20 years from now?

MALAYSIA is facing an increasingly worrying demographic reality as the number of children continues to decline, raising bigger questions about the future of the country’s workforce over the next two decades.

Data from the Department of Statistics Malaysia (DOSM) showed that the population aged between zero and 14 fell from 21.6 per cent in 2025 to 21.2 per cent in 2026, while those aged 65 and above increased from 8.0 per cent to 8.4 per cent over the same period.

At the same time, the median age of Malaysians rose from 31.3 years to 31.7 years, reflecting the country’s shift towards an ageing society.

The trend may not have a significant impact today, but its implications are likely to become more apparent when the smaller generation of children enters the workforce in the next 15 to 20 years.

If the number of babies born continues to decline each year, Malaysia risks facing a shortage of productive workers to fill various sectors of the economy.

More concerning is that the elderly population will continue to grow, meaning a smaller working population will have to shoulder the costs of healthcare, welfare and social protection for an increasingly ageing population.

A similar situation has already emerged in several developed countries, including Japan and South Korea.

Although Malaysia still enjoys a demographic dividend, with more than 70 per cent of its population within the working-age group of 15 to 64, this advantage will not last if birth rates continue to decline.

The reality is that fewer children today are not merely a statistical issue, but an indicator of the size of the future workforce.

The question is, why are more couples choosing to have fewer children or delaying parenthood?

The rising cost of living is among the key factors frequently cited, with house prices, education costs, childcare expenses, nursery fees and daily necessities prompting many young couples to be more cautious before expanding their families.

Lifestyle changes also play a role, as many are choosing to marry later, focus on their careers or achieve financial stability before starting a family.

The question that deserves greater discussion is whether existing policies are sufficiently family-friendly to encourage young couples to have more children.

Various incentives, including tax relief, maternity leave and assistance for families, have been introduced, but the question remains whether these measures are genuinely capable of easing the increasingly high cost of raising children.

In the long term, the government also needs to assess whether childcare facilities, flexible working arrangements, affordable housing and support for working parents should be strengthened as part of the country’s demographic strategy.

Malaysia still has time to act, but every year that sees the number of children decline brings the country closer to a point where the new workforce may no longer be able to replace retiring generations.

The question now is no longer why Malaysia has fewer children, but who will drive the country’s economy when today’s generation leaves the workforce two decades from now?