The Need for and the Needs of Older Workers: An International Perspective

Demography may not be destiny, but it certainly can be constraining. In particular, the dual arrival of low fertility and increased longevity among populations worldwide is generating a host of pressures, none more pronounced than at the intersection of nations’ labor force needs and their aging workforces. Projections across a range of countries make clear that the number of workers needed to propel economies forward is soon to fall short absent the redesign of a host of public and private practices tied to labor force participation (LFP). Beyond measures encouraging greater employment among the traditional working-age population, a key added ingredient will be increasing the continued employment of older workers. How to bring about greater employment among older adults has become a high-priority topic in both the public and private sectors, involving economic, labor force, and social welfare concerns. While a near imperative has emerged to promote more work effort from older people, the means for bringing this about in both an effective and equitable manner remain in the early stages of development. So-called demand-side reforms include subsidies to employers of various kinds to encourage continued or renewed work effort from senior workers; supply-side initiatives center on a range of training and workforce development strategies to better position those potential employees for the jobs needed in rapidly changing economies. This issue of Public Policy & Aging Report examines how eight nations are addressing the challenge posed by aging workforces and slow-growth populations. The common theme across the contributions is workforce development, what individuals, businesses, and government must do to employ older workers and their skills in ways to both stimulate economic growth and promote individual well-being. Understood, as well, as an issue within the world of social gerontology, workforce development speaks to “productive aging” in a largely economic context, augmenting the civic and voluntary activities most frequently associated with that construct. That said, the balance between older adults’ economic contributions and their social welfare needs must remain central to workforce development discussions. Macro-level developments may be shifting the work-and-retirement scale in the former direction, but the two roles must be understood as inextricably intertwined. As several of the contributions here make clear, who can, does, and should be induced to remain in the labor market is proving to be a knotty issue. The opening article, by Phyllis Cummins, Philip Taylor, and Suzanne Kunkel, provides a thoughtful and provocative introduction to the topic. The authors took the lead in assembling these cross-national analyses, and they demonstrate in their own article the insights to be derived from the following country studies. They first document and project the remarkable life expectancy increases at normal retirement age for both women and men across the eight countries for the period 1958–2050. For men, the increase in post-normal retirement age life expectancy for all countries will be 50% or greater; in the case of Taiwan, the number of years is expected to double. Among women, the post-retirement age increase will nearly double in the case of Sweden, but will only rise roughly 10% in Australia. After a long period of decline, the LFP rate among men cross-nationally began to increase beginning roughly in the late 1980s; however, in the case of women, there has been a consistent cross-national increase dating back to 1980 if not before. The authors conclude by noting the variation in national approaches—through adult education and lifelong learning programs—of ways in which countries are encouraging greater later-life employment. Some rely on individual worker initiatives, others turn to business and government to fund or mandate such programs. The authors do worry—and the country articles clearly do demonstrate—that advanced age, less education, and health decrements are not adequately addressed in efforts to promote late-life work. In Sweden, Clary Krekula and Lars-Gunnar Engstrom find that efforts to promote extended work life are based largely on individual incentives, which fail to recognize workers’ age and professional skills. They argue that poor health and work-related disability are under-recognized, and that a health and skills perspective needs to be added to the Swedish policy mix. The authors go on to note that Sweden has a highly developed lifelong learning system involving second-chance training and correcting unwise decisions individuals might have made earlier in life. Nonetheless, there is a low take-up rate among people age 50–64, and the system is faulted for its “homogenous” approach to training, failing to recognize varying levels of education and job skills. No nation will struggle with labor force issues more than Japan, which has both one of the lowest fertility rates and highest life expectancies in the world. As recounted by Robert Clark, Rikiya Matsukura, Naohiro Ogawa, and Satoshi Shimizutani, Japan’s population is expected to fall from 128 million in 2012 to 117 million in 2030, and the proportion of aged individuals will rise from 23% in 2010 to 33% by 2035 and to 40% by mid-century. As for the situation of older workers, Japan presents a very contradictory picture: on the one hand, more than 80% of firms have mandatory retirement policies, but the LFP of older Japanese is among the highest of the developed nations. Firms rehiring older employees in lesser roles and large numbers of older workers turning to bridge jobs help explain the seeming discrepancy. Low readiness levels for retirement also help account for the high percentage of older workers. The authors conclude by noting that the demand for older workers may slow if companies choose to relocate overseas for inexpensive labor rather than engage in helping older workers gain the skills they may need to compete with foreign workers. Germany has emerged as an international leader in older worker workforce development. After years of encouraging early retirement, the country introduced a host of active aging policies designed to retain older workers. As presented by Juergen Deller, these efforts involved a mix of public and private resources, including the demand-side inducements of sabbaticals, flextime, and intensive skills training. Among small- and medium-sized enterprises, Deller reviews how a three-part strategy of basic, cooperative, and funded network models have been employed to maintain older worker employment. He then briefly reviews the quite remarkable efforts that BMW has made in this arena. Beginning with health management programs, the company’s efforts expanded to include ergonomic changes across its plants internationally, age-management seminars for managers, and full involvement of production line workers in the change process. Nascent bridge job initiatives are concentrated on imparting knowledge and skills from older workers to younger ones. As suggested by Ines Monteiro, Philip Taylor, Aparecida Iguti, and Phyllis Cummins, Brazil faces several challenges as it anticipates a growing older workforce. Levels of formal education remain low throughout the population, workforce development programs are limited, and those which exist barely encompass older workers. Moreover, older Brazilian men are retiring at earlier ages, even in the face of inadequate retirement prospects. The authors recommend that educational opportunities be put in place for workers who have had only limited formal education earlier in life in order to allow them to upgrade their skills. But the authors acknowledge that instituting meaningful programs will be difficult on multiple grounds, not least is a widespread lack of awareness of older workers’ needs given “Brazil’s young country culture” ( Monteiro et al., 2015 ). Sarah Vickerstaff, Chris Phillipson, and Wendy Loretto find officials in the United Kingdom have recognized the challenges faced by workforce aging, but they are guarded in how they view the prospects for reform as they currently stand. The government has moved to delay normal retirement and has instituted a range of adult learning programs tied to employment. While the proportion of employed older adults has increased in recent years—including a doubling of those age 65 and over—the majority of people are still likely to leave paid work at some point in their 60s. Efforts are in place to extend working lives—financial incentives, flextime, anti-age discrimination measures—but these individual-focused initiatives fail to adequately recognize health problems among older workers in light of their frequently having fewer job skills than younger people competing for the same jobs. A major survey found age-related shortcomings in skills-upgrading training, and the authors suggest the direction of such training may be misguided. Instead, they call for efforts to increase employee growth and development rather than the current emphasis on “plugging the skills gap.” Tsui-Fan Lin, Yu-I Peng, and Jennjou Chen present a mixed picture of older workforce development actions in Taiwan. A number of initiatives have been undertaken by the Workforce Development Agency (formerly the Bureau of Employment and Vocational Training), including job matching and employment services, income maintenance, vocational training, and employment development programs through both government and the private sector. Among those receiving vocational training, 25% are workers above age 45. The need for these programs seems clear in that the LFP rate of workers age 55–64 was roughly only 40%, even in the face of a reported unemployment rate of only 2% among this population. This seeming anomaly results from widespread early retirement and withdrawal from the labor force among the older population. To rework this situation, in addition to the above initiatives, the government has raised the normal retirement age, allowed payment of retirement benefits while workers are still employed, and increased portability of benefits through a new scheme of individual pension accounts. The authors call for additional steps to be taken toward creating more age-friendly workplaces and placing greater emphasis on involving older workers in workforce development programs. Indicating that the aging workforce will increasingly be a female one, Philip Taylor and Christopher McLoughlin examine survey findings concerning training and employment of older women in Australia. Where training was paid for by an employer, they find that older women were less likely to receive training than others, clerical workers were less likely than managers, and the less educated were less likely to receive such training than the more educated. Women who were separated or divorced or who had caregiving responsibilities were less likely to complete on-the-job training. On the demand side, willingness to invest in human capital had the strongest association with workforce development. Comparing employer-sponsored versus self-funded training led the authors to an intriguing temporal distinction: employers appeared to give greater attention to the age of potential trainees, whereas women engaged in self-funded training focused more on the anticipated time to retirement. A number of themes found cross-nationally hold for the United States as well, as seen in the analysis by Phyllis Cummins, Bob Harootyan, and Suzanne Kunkel. LFP by women is increasing, with older, low-income, and long-term unemployed workers less likely to be engaged in training than younger ones. In order to delve deeper into these realities, the authors examine two data sets, one involving training experiences under the Senior Community Service Employment Program (SCSEP) and a second using the U.S. data from the Program for the International Assessment of Adult Competencies (PIAAC). Key findings from the SCSEP data reaffirmed lower training rates among older workers and more specialized training being offered to younger workers and to those with higher levels of education. Given that one of SCSEP’s objectives is to serve those elders most in need of employment, these are problematical findings. A key result from the PIAAC data found participation rates for the unemployed to be significantly lower than for the employed. Toward addressing these shortcomings, the authors call for increased funding for SCSEP, better matching of trainees to their community service assignments, and tax incentives for employers to provide more adult education and training. In the face of demographic and economic forces virtually mandating greater LFP among older workers, the analyses found here point to a set of common barriers addressing that imperative. National pension policies are moving in the direction of encouraging more late-life work, but there are further steps to be taken in several countries. All of the nations represented have moved beyond providing cash benefits to the unemployed by developing active labor policies, ones that encourage older adults to remain in (or return to) the labor force. For the most part, these efforts center around adult education and training and allied workforce development initiatives. Yet, with rare exception, the intent of these programs remains far removed from the desired results. Age bias is widespread, workers already economically and educationally disadvantaged are less likely to be the beneficiaries of training, and governments are yet to have made the investments or taken the regulatory steps necessary to realize the needs and abilities that older workers bring to the employment table.