NCPA - National Center for Policy Analysis


November 2, 2005

Facing aging populations with fewer younger workers to support retirees, industrialized countries are considering policies to encourage older employees to work longer, particularly since people have longer life expectancies, says the New York Times.

Western European countries are particularly at risk; by 2050, most European countries will have one worker per retiree. For example:

  • Currently, only 43 percent of Italians in their late 50s are in the labor force, and less than 20 percent of those in their early 60s are working.
  • In France, only 14 percent of people aged 60 to 64 are in the labor force, compared to 51 percent in the United States.
  • Asians tend to remain in the workforce the longest, which is crucial since one-third of the populations of Japan and South Korea will be over age 65 by 2050.

According to the Organization for Economic Cooperation and Development, laws in some countries that aim to preserve jobs may cause older workers to lose their jobs. In cases where employers cannot fire younger workers, they may resort to forcing older workers out and into early retirement.

Furthermore, while unemployment rates for elderly workers are typically low, those who are counted as unemployed rarely find jobs. In France and Germany, more than 60 percent of individuals aged 60 to 64 who are looking for work have been unemployed for over a year.

Some countries are considering major changes, such as reforming systems that make it easier to collect benefits rather than look for work. Italy passed legislation that would raise the retirement age, but it will not take full effect until 2030.

Source: Floyd Norris, "With That Longer Life Expectancy Expect a Life of Working Longer," New York Times, October 29, 2005.


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