Global Aging Workforce – It will add further pressure to future labour market challenges

As a result of rising life expectancy and declining birth rates, global population growth has considerably decelerated and this trajectory is expected to continue over the next few decades. One immediate implication of this slowdown is that growth of the global labour force will not be suf cient to compen- sate for the rapidly expanding pool of retirees, putting pressure on both the pension system and the labour market as a whole. In developed countries, where population ageing is considerably faster, it is estimated that, by 2030, there will be close to ve persons aged 65 and over for every ten persons in the labour force, up from 3.5 in 2017.

Meanwhile, population ageing will inevitably lead to an increase in the average age of those in the labour force, challenging workers’ ability to keep up with the pace of innovation and structural changes in the labour market. Globally, the average age of the labour force is expected to rise from nearly 40 in 2017 to 41 in 2030, growing considerably faster in Europe and Eastern Asia, notably China.

Taken together, these trends pose several challenges, including keeping retirees out of poverty, promoting decent work outcomes for an increasingly ageing labour force and helping older workers adapt to changes in the world of work. Arguably, old-age poverty is inherently tied to existing labour market inequalities, as workers with inferior working conditions and incomes have less access and capacity to contribute to a retirement savings scheme. Therefore, ensuring adequate labour market opportunities for all, while also improving labour market outcomes, constitutes an important cornerstone to the goal of alleviating old-age poverty. In this regard, fostering the employability of workers through life-long learning is key to expanding their employment opportunities, also at an older age. Targeted actions are also needed to encourage older workers’ participation in training and skills-updating schemes in order to help lower the risk of labour market detachment and early retirement which would put added pressure on pension systems.

Chosen excerpts by Job Market Monitor. Read the whole story at World Employment and Social Outlook – Trends 2018 [Summary]