Labour Markets

The Growing Importance of Older Workers in the Workforce

The number of people over 65 in OECD countries is on the rise, expected to jump from 18% in 2022 to 27% by 2050. This means more older adults are staying in the workforce longer. And as we’re living longer—a 4.8-year increase in life expectancy since 1970—working later in life is becoming more common.

The latest report from the OECD, ‘Pensions at a Glance 2023’, points out that a lot of countries are adapting to this change. They’re nudging up the retirement age and encouraging people to work longer. Soon, the OECD-average retirement age hit 66.3 for men and 65.8 for women just starting out in their careers.

The employment rate for those aged 55 to 64 has hit a new high of 63.9% as of Q2 2023—almost 8 percentage points higher than ten years ago.

But it’s not all smooth sailing. The OECD points to many challenges ahead for older workers, saying that “many older workers still struggle to keep their skills up to date, have limited access to good-quality jobs, and risk having an inadequate pension in old age because of short and unstable working careers.”

And there’s a wide gap in employment rates for older workers across different countries. For example, in Iceland, 82.8% of older adults are working, compared to 67.3% in Slovakia and as low as 55% in Greece and 46.8% in Luxembourg. This tells us that the situation can vary greatly from place to place, and that many countries have great potential to improve.

To sum it up, while more older adults are working than before, ensuring they have the skills, job quality, and security they need is crucial for strong pension systems and labor markets ready to meet future challenges.

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