Working Better with Age
People today are living longer than ever before, but what is a boon for individuals can be challenging for societies. If nothing is done to change existing work and retirement patterns, the number of older inactive people who will need to be supported by each worker could rise by around 40% between 2018 and 2050 on average in the OECD area. This would put a brake on rising living standards as well as enormous pressure on younger generations who will be financing social protection systems. Improving employment prospects of older workers will be crucial. At the same time, taking a life-course approach will be necessary to avoid accumulation of individual disadvantages over work careers that discourage or prevent work at an older age; What can countries do to help? How can they give older people better work incentives and opportunities? This report provides a synthesis of the main challenges and policy recommendations together with a set of international best practices to foster employability, labour demand and incentives to work at an older age.
Strengthening incentives to build up longer careers
Over past decades, much of the policy focus in OECD countries to deliver longer working lives has been on increasing incentives to continue working at an older age. Countries have been reforming old-age pensions and restricting the use of early retirement schemes and other passive benefits. Some reforms have also sought to make it easier to combine income from work and the pension as well as reduce financial penalties to working longer. In many countries, the statutory age of retirement has been raised to improve the financial sustainability of the pension system. However, higher retirement ages must be accompanied by greater employment opportunities at an older age to avoid hardship for older workers. Good‑practice measures towards a more inclusive labour market for older workers should facilitate phased retirement, with better possibilities for combining work and retirement while preventing welfare benefits being used as alternative pathways to early retirement.