The global economy is moving into a new period which will see unemployment continuing to rise over the coming years.
By 2019, more than 212 million people will be out of work, up from the current 201 million, according to the World Employment and Social Outlook – Trends 2015, a publication of the International Labour Organization. Part of what’s causing this is the slowdown in the supply of labour -- and that -- is partly affected by the world’s ageing population.
ILO senior economist Ekkehard Ernst explains: “The number of older people is rising everywhere in the world. The share of older workers aged 55 or above in the world’s workforce expanded from 10.5 per cent in 1990 to an as yet unseen 14.3 per cent in 2014.”
Ekkehard suggests that by 2030, the number of older workers in the labour force is likely to increase by a further 270 million to almost 750 million workers. That translates into more than 18 per cent of the total labour force.
The older a workforce gets, the higher the likelihood of slowdowns in economic growth. But it’s not the age of the labour force per se that’s the issue…but rather it’s the ageing of the labour force that makes an economy more vulnerable to slackening economic growth.
Ekkehard explains the difference: “Actually, economies that have a labour force that is older on average are likely to have accelerations in growth. Older workers are seen as giving a boost to an economy because of their greater work experience and that might help them to judge more accurately for instance whether a new technology will be beneficial to work processes. But, when the labour force itself is rapidly ageing, there might be skill mismatches that cost more to deal with, as companies need to shift the workplace to the needs of older workers.”
In general, older workers may be inclined to adopt new technologies given that technological progress often works in their favour, letting them replace physically demanding jobs with cognitive tasks, and they may be better suited to these than younger colleagues.
So how will countries offset their ageing supply of labour? Ekkehard says older workers should be enticed to stay in jobs. And another part of the solution lies in employing more women.
Ekkehard: “Economies with higher labour force participation rates of women experience fewer growth downturns. More women workers not only make economies more resilient to adverse economic shocks but a labour force with more women also presents a powerful anti-poverty device.”
For women, policy incentives include things like flex-time, maternity and childcare benefits. For older workers, they mean such policies as lifting tax penalties for pensioners.
Reporting for the ILO, this is Carla Drysdale.