Key messages: Population ageing is both a challenge and an opportunity for all OECD countries. There are significant cross-country differences in the rate of population ageing and some countries face much bigger challenges than others. Therefore, the scale of the measures required is not the same across countries nor is the urgency with which reforms need to be put in place. Nevertheless, all countries will need to mobilise more fully the potential labour resources of older people as the key policy response to population ageing.

Key messages: In all countries, older workers face a range of work disincentives and barriers to employment which need to be tackled by a comprehensive agenda of reform. However, there is also considerable diversity in the labour market situation of older people both across countries and within countries which needs to be factored into this agenda. A number of factors are working in favour of better employment opportunities for older workers in the future but there is no room for complacency.

Key messages: Older people face a range of work disincentives and barriers to employment. First, there are penalties or low rewards for carrying on working in old-age pensions and other parts of the tax and welfare system. Second, employers are often reluctant to hire older workers or retain them in their jobs for a variety of reasons. Finally, older workers themselves can find it difficult to stay in their jobs or to find new ones. The challenging task of lowering these barriers and disincentives to work is magnified by the legacy of public and private early-retirement schemes that have created an expectation of early retirement. Given the many factors at work, pension reform alone will not be sufficient enough to promote employment opportunities for older workers.

Key messages: Pension reforms can alter the incentives to work and influence workers’ decisions on the timing of retirement. Reform measures include reductions of pension replacement rates, increasing the official and the earliest ages of retirement, and correcting the increments and decrements of pension benefits for early and late retirement. More flexibility in combining work and pensions could also help to increase labour-market participation of older people. Pension reform has been widespread across OECD countries, but a number of difficult issues remain in terms of finding the appropriate balance between, on the one hand, encouraging later retirement and, on the other hand, increasing flexibility in work-retirement choices. These issues include the appropriate design of more actuarially-neutral pension systems and whether countries should go beyond actuarial neutrality and take a more active stance in terms of promoting later retirement. Finally, while pension systems are being reformed, it is essential to ensure that other welfare benefits are not used unjustifiably as paths to early exit from the labour market.

Key messages: Employer reluctance to hire and retain older workers partly reflects age discrimination and, thus, there is a need for information campaigns, guidelines and age-discrimination legislation. However, there are also a number of other, more objective factors driving employer behaviour. For example, this may include seniority wages or strict employment protection legislation. All of these factors will need to be tackled in order to encourage employers to provide older workers with more job opportunities. This will also require a change of attitudes on the part of trade unions and older workers themselves.

Key messages: Up-to-date skills, good access to employment services and better working conditions are three key aspects of employability that will affect the ability of older workers to find and keep a job and that will influence their retirement decisions. These three aspects will become increasingly important as larger cohorts of workers move into the older age groups and more of them stay on longer at work. Again, the responsibility for change needs to be shared between governments, employers, trade unions and older workers themselves.

Key messages: Action is required on many fronts if work is to be made a rewarding and attractive proposition for older people: work incentives must be improved; employers must be encouraged to hire and retain older workers; and the employability of older workers must be strengthened. Thus, a co-ordinated and comprehensive package of agefriendly employment measures and policies is required, which should be developed and implemented jointly by government, employers, trade unions and civil society.