The total fertility rate is below the replacement level of about 2.1 – the number of children needed to keep the total population constant – in 32 out of 34 OECD countries in 2013. The exceptions to this are Israel with a total fertility rate of 3.0 and Mexico at 2.2. In two-thirds of OECD countries fertility rates have slightly increased since the early 2000s. Fertility rates have a profound implication for pension systems because they, along with life expectancy, are the drivers of population ageing.

The remarkable increase in life expectancy is one of the greatest achievements of the last century. Lives continue to get longer, and this trend is predicted to continue. In 2010-15, life expectancy at birth averaged 77.2 years for men and 82.7 years for women. Among women, the figure was highest in Japan (86.9 years), followed by Spain, France, Italy and Switzerland. For men, life expectancy at birth was highest in Iceland (80.2 years) followed by Australia, Switzerland, Japan and Israel.

The demographic old-age dependency ratio will double by 2075 compared to today keeping age thresholds constant. Population ageing has been one of the main driving forces behind the wave of pension reforms in recent years. At the moment, there are 28 individuals aged 65 and over for every 100 persons of working age (ages 20 to 64) on average across all OECD countries. In 1950 the demographic dependency ratio was equal to 14, and has increased to 28 in 2015. The demographic dependency ratio is expected to continue to increase and to reach 35 in 2025, 51 in 2050 and 55 by 2075.

The employment rate falls with age in all OECD countries. For individuals of age 55 to 59 the average employment rate across all OECD countries was equal to 67% in 2014 against 44% for the 60-64 age group and 20% for the 65-69s. In 14 OECD countries the employment rates were above the OECD average for all age groups, by contrast it was below average for all age groups in 13 OECD countries. Employment rates of people aged 55-64 have improved over the past decade in most OECD countries, from 48% in 2004 to 56% in 2014.

The average effective age of labour market exit was 64.6 for men and 63.1 for women across OECD countries in 2014. Across all OECD countries, the average effective age of labour market exit is six months higher than the average normal retirement age for men and equal to the average normal retirement age for women. The lowest effective exit age is found in France for men and in the Slovak Republic for women at 59.4 and 58.2 years, respectively. On the other range of the scale, Korea displayed the highest figures, at 72.9 years for men and 70.6 years for women, respectively.

The expected years in retirement indicator measures the length of expected remaining life expectancy from the time of average labour market exit by gender. In 2014 the OECD average for the number of expected years in retirement was 17.6 years for men and 22.3 years for women. France had the highest expected time in retirement, where it was equal to 23.0 years for men 27.2 years for women. Korea had the lowest expected years in retirement and here it was 11.4 years for men and 16.6 years for women. The average duration of expected years in retirement across OECD countries has increased over time. In 1970 men in the OECD countries spent on average 11 years in retirement, and women 15. By 2014 this had increased to 18 and 22 years respectively.