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The Aging Readiness & Competitiveness Report

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    United Kingdom
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    Turkey
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    South Africa
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Canada

Productive Opportunity

Canada has seen a deceleration in its workforce growth over the past decade, with the trend expected to continue as the baby boom generation retires. In response, the government has placed greater emphasis on broadening the labor force participation of all citizens, including older people. However, the transition from the Harper administration, which favored fiscal conservatism, to the more liberal Trudeau administration, which is prioritizing increased public spending and social supports, has resulted in a different policy direction with respect to older workers. The change is evidenced in the Trudeau administration’s decision to cancel a planned increase in the pensionable age of the basic Old Age Security to 67 in 2023, citing the importance of protecting vulnerable seniors. Instead, the new administration has stated its intention to increase incentives for those who are willing and able to remain in the labor force.

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United States

Productive Opportunity

Older Americans’ labor force participation rate has increased dramatically over the past several decades and is up by more than 50 percent over the period of 2000 through 2017, with participation by older women growing over 70 percent during that period. The labor force participation rate for both men and women is expected to grow further to reach 21.7 percent by 2024. The upward trend is a result of converging factors, including acute economic shocks, which adversely impacted retirement accounts, a shift toward employee-driven benefit plans, and an increasing number of older adults electing to remain in the labor force. As Americans are living longer lives and need greater economic security, a growing number are seeking to stay at or return to work.

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Mexico

Productive Opportunity

Older adults in Mexico work longer, on average, than their peers in most other OECD countries. However, this high labor force-participation rate is largely driven by the high poverty rate associated with the country’s large informal economy. The government has focused on alleviating poverty through a non-contributory pension scheme, with less focus on tapping the productive potential of its older population. Despite the desire to work, many older Mexicans face rampant ageism among employers, and local organizations report that this often begins at as early as age 35. Efforts to provide further education and training to help the older population gain employment remain scarce, and even moreso outside of large urban areas.

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Brazil

Productive Opportunity

Tapping productive opportunity among the older population is not a priority for the Brazilian government, which has focused on addressing immediate development issues, such as poverty, inequality, and credit booms. Social welfare programs have used direct cash payments as the primary tool to support vulnerable groups, creating a disincentive for labor force participation. Looking ahead, the government has pledged to undertake potential reform as part of its efforts to pursue long-term fiscal sustainability, but it has attracted widespread opposition.

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United Kingdom

Productive Opportunity

Recognizing the economic potential of their aging population, the British government has sought to foster more age-friendly labor markets. In addition to reforming the pension and public benefit system to provide incentives to stay in the labor force, a range of other policies have been pursued with this objective in mind, including those that provide assistance to help older adults go back to work. However, research by Age UK has shown poor outcomes for many older workers who face a range of challenges such as hourly cutbacks, insecure employment, and difficulty transitioning in the tech-based economy. While the labor-participation rate is increasing, there remains notable age discrimination in the workplace in spite of legislative programs over many years attempting to address it.

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Germany

Productive Opportunity

Germany’s older adult labor force participation rate remains low but is growing rapidly. Germany’s “baby boom” generation will begin to reach the retirement age of 65 in 2019, which will set off a dramatic acceleration in the shrinking of its labor force. In order to address this, the government has undertaken retirement reforms, including raising the pensionable age and introducing flexible retirement options, and has established programs to provide employment opportunities, education, and training, and to improve workplace conditions for older employees.

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Turkey

Productive Opportunity

The large gender disparity in the labor force, due to women retaining the central role in managing household responsibilities, has been a central obstacle to tapping the productive potential of Turkey’s older population. A push by the government to encourage families to have more children could further exacerbate this issue. As a society grappling with rising youth unemployment, economic engagement for older adults has not been elevated to a public policy priority, although ongoing gradual increases in the pensionable age are expected to boost participation in the labor force. Today, Turkey has the lowest normal pensionable age for men and women within the OECD.

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Israel

Productive Opportunity

Israel has relatively high older-age labor force participation, compared with other OECD countries, partly due to its pension system and retirement age reform in the early 2000s. As the population continues to age, the government is paying greater attention to older adults’ economic participation. A variety of policies and programs have been put in place, often in collaboration with NGOs, to create employment opportunities for older adults and to improve their employability, with an emerging focus on helping older job-seekers tackle online job applications. One potential policy that could also immediately boost older adults’ participation in the labor force would be to raise women’s retirement age, an idea that has been controversial.

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South Africa

Productive Opportunity

Older adults in South Africa participate in the labor force at very low levels largely due to the provision of a non-contributory pension. Since the early 1900s, the Old Age Grant, which serves as South Africa’s only nationwide public pension scheme, has been available to adults age 60 and older who pass a means test. It is received by the overwhelming majority of the older population.

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China

Productive Opportunity

The Chinese government has thus far missed the productive opportunity that the older labor force represents. As in other countries, older Chinese workers face barriers, including age discrimination by employers and lack of relevant skills. In contrast to its efforts to improve social infrastructure for older adults, the government has paid much less attention to providing training to improve their employability and to cultivating age-friendly workplaces. The lack of legal protection for the rights and interests of older adults who resume working post-retirement also inhibits this population from re-entering the labor force.

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Korea

Productive Opportunity

The Korean government has been seeking to facilitate economic participation of both current and future retirees. To address the needs of today’s older population, whose high level of interest in employment is driven mainly by poverty, the government has augmented assistance to improve their skills and employability. Meanwhile, in the pursuit of fiscal sustainability of the public pension system, the government has been working to extend the retirement age to allow older people who are about to retire to stay in the workforce, including the promotion of a controversial wage peak system. These policies have been met with criticism, due to a widely held zero-sum perception that older workers’ participation in the workforce takes away job opportunities for younger people. However, given the educational attainment of baby boomers, the government’s effort to increase older adults’ participation in the workforce could yield positive results for the economy as the society ages.

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Japan

Productive Opportunity

Japan has the world’s most rapidly shrinking population ages 15 through 64, a trend that has elevated the importance of mobilizing the older workforce to boost economic growth and to meet public pension obligations. This economic imperative aligns with the interests of Japanese seniors, who have indicated a strong desire to remain active and employed. The government has adopted a variety of policy measures to increase workforce participation among older people, ranging from reforming the retirement system to assisting older people w ith job seeking. However, employers have yet to recognize fully the productive potential of the older population, thus far tending to hire older workers out of social or legal obligation. As a result, a mismatch persists between the skills and abilities of older job seekers and the nature of job positions available to them, leading to missed opportunity for the economy as a whole.

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Productive Opportunity

Countries around the world are grappling with having to sustain long-term economic growth as their working-age population shrinks as a share of the total population. For industrialized countries, as well as China, this is already an issue, but it is only 10 to 15 years away for some of their upper middle-income counterparts. Older adults are part of the answer – they are living longer and healthier, possess valuable experience and expertise, and increasingly seek to remain active and productive. Forward-looking governments and companies are acting to enable this by introducing flexibility into retirement, combating negative perceptions of older workers, and providing targeted support for those seeking to re-enter the labor force.

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Reforming pensions and other retirement systems is the most common strategy used by governments, but it is driven by fiscal constraints and therefore fails to address the real barriers that keep willing and able workers out of the market. Flexible retirement, which allows older adults to reduce working hours in exchange for extension of working life, is gaining traction in both industrialized and developing countries.

Ageism and misperceptions of older adults among employers are prevalent across both high-income and upper middle-income countries. They are the primary barriers faced by those interested in remaining in, or returning to, the labor force. Older workers are often seen as lacking marketable skills and having less potential to progress, learn new skills, and add value. While a number of countries have public education campaigns, the UK’s Age Positive Initiative (API), which began in 2013, could prove to be a worthy model for others. It provides employers with a toolkit to address retaining, retraining, and recruiting older workers, as well as guidance for employers and staff regarding a range of issues related to ageism in the workplace.

Flexibility in work can also be enabled by technology and a focus on entrepreneurship, but this requires supportive policy, which today is largely absent across countries. Japan, where the labor force has been shrinking for the past two decades, is seeking to promote telework and has set a goal of growing this segment to 10 percent of its total labor force by 2020. A particularly interesting model has emerged out of the UK, where the New Enterprise Allowance program offers financial support and coaching for individuals seeking to start a new business. While not targeted at older adults, they have been major beneficiaries, particularly those seeking to accommodate the care of a spouse.

Although many governments are working to support older adults’ job placement and employability, they typically focus on vulnerable groups (e.g., displaced workers and long-term unemployed workers) and tend to not do enough to deliberately tap the productive potential of experienced workers. NGOs often step in to fill the gap. Again, the UK is at the forefront – the Now Teach program retrains experienced professionals to become teachers in the country’s schools.

Percentage of Population Ages 15-64 of the Total Population

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