PwC has released its Golden Age Index report outlining which OECD countries are best at harnessing the economic power of workers aged between 50 and 64.
The report surveyed the number of older workers in 34 OECD countries, taking into account employment, earnings and training for over 55s. Analysts predict that, if all these countries rose to match Sweden’s level, which performs fourth best in the list, gains to GDP could be as high as $ 2 trillion overall, and could rise to 16% of GDP for Greece and 13% for Belgium.
“The life experience of older workers and the skills they have acquired throughout their career make them hugely valuable to the modern workforce. To build on this leading employers will offer older workers opportunities for development, including reverse mentoring schemes on digital skills and apprenticeships,” said Carol Stubbings, global people and organisation leader at PwC.
The average age in the UK exceeded 40 for the first time ever in 2014, and it is predicted that nearly one in seven will be over 75 by 2040. Aging populations pose potential problems: the International Monetary Fund has estimated there will be a significant drop in productivity growth in the Euro Area in the medium- to long-term, as the number of retired citizens grows and the average age of workers increases.
The UK’s employment rate for 50-64 year olds is currently 70%, with England faring best at 70.6% and Northern Ireland worst at 63.6%. Regional differences are attributed to economic performance, educational attainment and gender divides. The gender pay gap has also been shown to grow dramatically as age increases, a significant barrier to older women staying in work.
Turkey came in last at 34th place, having plummeted 12 percentage points since 2003, followed by Luxembourg, Slovenia and then Greece.
Here are the top 19 countries:
19. UK – This country has one of the world’s highest GDPs, according to the IMF. “The UK could boost its GDP by around 4.2% (around £80 billion at today’s values) if the employment rate of workers aged over 55 could match that of Sweden, the highest performing EU country,” says PwC.
18. Mexico – This country’s GDP is 15th in the world, according to the IMF. But it has seen the biggest fall in the rankings this year.
17. Portugal – This country has risen two places in PwC’s list, and has shown a marked decrease in the number of 65-69 year olds in employment since 2003.
16. Canada – This country has a relatively high GDP and number of older workers, but it could still increase GDP by about 3.3% if it boosted employment rates for those over 55 to Swedish levels.
15. Germany – This country has risen ten places since 2003, and has seen the biggest improvement in its score out of the G7 countries surveyed. This has been achieved through a combination of policies, including special training measures and publicity campaigns.
14. Finland – This country has the smallest gender gap between workers between the ages of 55-64, out of all those surveyed.
13. Denmark – Although this country has quite a large number of older workers, it is one of the few countries that has seen a fall in the average age of exiting the workforce.
12. Australia – This country has been one of the biggest risers, jumping eight places since 2003. This was achieved in part by reforming the pension system to make it more flexible and by better incentivising people over 70 to remain in the workforce.
11. Switzerland – This country has one of the highest employment rates for 55-64 year olds, and the highest rate of part-time work for the same age group.
10. Chile – This country has one of the highest average ages of people leaving the workforce. Chile is one of the few countries to outperform the Index relative to its (lower) income level.
9. United States – This country is now the second highest G7 country in the list, after Japan. It also has the second highest rate of training for 55-64 year olds relative to 25-54 year olds, out of all the surveyed countries.
8. Japan – This country has made a strong improvement, rising two places since 2014, and is now the highest G7 country on the list. It has the third highest rate of employment for 65-69 year olds, and the highest life expectancy. Those countries in which older workers play larger roles in the economy also tend to have higher life expectancies.
7. Korea – This country’s strong position means that it stands to gain the second least in GDP from raising its over 55s employment rate to be in line with Sweden’s. It is second for employment rates among 65-69 year olds, but still almost 10 percentage points below Iceland.
6. Norway – This country has done consistently well, helped by a reformed pension system that discourages early retirement and increases the flexibility of partial pensions. Shared parental leave has also been the norm since the 1970s, which has helped support women in returning to work.
5. Estonia – This country has the second lowest gender gap for employees between 55-64. It also has one of the lowest rates of part-time work for the same age group. Like Chile and Mexico, it outperforms most other countries relative to its income.
4. Sweden – This country has been used as a benchmark to determine how much other countries’ GDP could increase if they increased their older worker population to be in line with its own. Compared to the OECD average, it has higher employment rates for 25-54 year olds, for 55-64 year olds and for women between 55-64 in full time employment.
3. Israel – This country has risen ten places since 2003, and the retirement age has gradually increased since 2004. Israel has proposed introducing training programmes for older women in particular, and has helped raise the average income of older citizens.
2. New Zealand – This country has risen seven places since 2003, and has been consistently in the top three since 2007. This has been achieved in part through reducing barriers to work for older workers and ensuring employers allow older workers to be flexible with their working hours.
1. Iceland – This country has the highest rate of employment for workers between 55-64 year olds, at 85%. It has consistently topped the list since 2003. It encourages training and higher education for mature students, for workers over 50 and for women in particular.
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