Tuesday, November 18, 2008

OECD chief says we must encourage older workers to stay in the job force

"In an era of rapid population aging, we can no longer afford policies, employment practices and attitudes that discourage work at an older age. They not only deny older workers the choice of when and how they should retire, but are costly for business, the economy and society.

The key message that emerges from the OECD's work on population aging is that it is both a challenge and an opportunity. If nothing is done, population aging poses serious economic and social challenges. But it is also raises the prospect of longer, more prosperous lives, if increases in longevity are matched by longer working lives.

We are living longer and healthier lives on average than previous generations. If we have the courage to change our outdated policies, attitudes and employment practices with respect to work at an older age, we should be able to enter a virtuous circle where longevity promotes activity, and activity, in turn, promotes wealth and well-being.

But if nothing is done to promote better employment prospects for older workers, the number of retirees per worker will double over the next 50 years in OECD countries. This will place severe strains on the financing of social protection systems. Labor force growth has been an important contributor to economic growth in the past; but this will slow considerably over the next 50 years and in some OECD countries the labor force could even shrink. We have projected that Japan's total labor force could shrink by over one-third between now and 2050. Recruitment difficulties will also increase. In Europe, the number of workers retiring each year is likely to exceed the number of younger people entering the workforce by more than one million from around 2020 onwards. Employers may face even greater recruitment difficulties in the future in specific sectors such as health care.

To help meet these daunting challenges, work needs to be made a more attractive and rewarding proposition compared with the siren songs of early retirement. But how can this be achieved? The OECD's 2006 report, Live Longer, Work Longer, offers some answers based on its 4-year study of aging and employment policies in 21 OECD countries. It shows that there are three key factors discouraging older people from work, which need to be tackled urgently."

Source and more:  AARP International, http://www.aarpinternational.org/resourcelibrary/resourcelibrary_show.htm?doc_id=727357

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