Islands on the Brink of a Demographic Collapse

Channel Islands Could Boost Economy by £150m Annually Through Workforce Reforms, Report Finds

The Channel Islands stand to gain over £150 million in annual tax revenue by increasing workforce participation and tackling the challenges of an ageing population, according to a new report by PwC.

The report highlights that strengthening employment rates within the islands' current population could generate an economic uplift of around £700 million. However, it warns that without action, both Jersey and Guernsey could face worsening skills shortages driven by ageing demographics and low birth rates.

Leyla Yildirim, Chief Strategy Officer at PwC Channel Islands, emphasized the urgency of the issue, stating, “It is critically important to focus on workforce participation if the islands are to avoid a demographic ticking time bomb.”

The analysis compares the Channel Islands to New Zealand, which is seen as a global leader in workforce inclusion. If the islands were to match New Zealand’s employment levels, they could see their workforce grow by approximately 7,500 people.

Guernsey, in particular, shows greater potential for tax gains due to a higher number of residents currently not participating in the workforce.

The report also points to high early retirement rates and limited full-time workforce re-entry for women after childbirth as key factors behind current employment levels.

To address these issues, the report recommends that governments consider expanding access to affordable childcare and improving educational opportunities. It also encourages employers to offer more flexible working arrangements and to engage older workers more actively. Meanwhile, islanders are encouraged to adopt a culture of lifelong learning to stay competitive in a changing economy.