The consequences of an ageing workforce

I provide labor force projections by age, sex and highest level of educational attainment until 2060 for India and China. This will allow to not only compare the development of the labor force in terms of size and age-structure, but to additionally make it possible to show changes in the educational distribution within the economically active population. This is of particular interest since for China, the absolute size of the labor force is projected to decline by 2030, and the population is projected to age rapidly during the next decades. Some of the expected negative economic consequences of this development might possibly be compensated for by a more educated, more productive labor force. India, whose working-age population is not projected to decline, nor is its population aging as quickly, would still benefit greatly from a better educated labor force. It will be shown that depending on the assumed path of future educational expansion and of education-specific labor force participation, the labor force in both countries could develop along very different paths.

Research on the effect of rising human capital on the consequences of population aging rarely considers the fact that the elderly population has its own human capital composition achieved through earlier schooling and work experience. Hence, for an elderly population of a fixed size and age-sex composition, the higher its human capital, the higher is the total amount of public pensions to be paid. We construct an old age dependency ratio (OADR) where we assign to each person a number of units corresponding to his/her level of human capital. The dynamics of this human capital-specific OADR is examined using data for Italy. Multistate population methods were utilized for long-term projections to 2107. Under specific conditions, a constant or a moderately increasing human capital may cause aggravation of consequences of population aging rather than their alleviation. We intend to replicate this study for several other European countries where data are available.

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This paper makes a new interpretation of “migrant worker shortage” in China from a unique perspective of demographic swings. The demographic swings have caused dramatic structural changes of working-age population: on the one hand, working-age population is keeping ageing gradually and the proportion of the younger workers is declining, while the employers insist employing migrant workers that are both young and vigorous. On the other hand, the number of workers newly entering into the labor market is declining every year, which undermines the company’s paths for annual turnover of workers. What is more, the higher education creates the first profession division, the expansion of which results in the decline proportion of manual workers in the young workers that has already been shrinking. Therefore, the shortage of migrant workers is not a sign of the Lewis turning point which is described as the decreasing migration flows from rural areas to urban due to the vanishing of the surplus labor force in rural areas, but an issue associated with the overall reduction in size of young manual-worker population caused by demographic swings and the enlarging enrollment of university. It’s a vivid representation of Easterlin’s point of view: the fluctuation of population exerts a great influence on the economic and social development.

One aspect of the expected negative economic consequences of population aging in Europe is based on the anticipated shrinkage of the labor force. However, a smaller but more productive labor force might be able to alleviate some of these expected consequences of population aging. Using data from the European Labor Force Survey, I project the economically active population for 26 EU-countries up to 2053 by age, sex, and highest level of educational attainment. Adding the education dimension has an effect on the absolute size of the projected labor force – due to significant heterogeneity in participation across education categories – and allows inferences about the composition of the labor force beyond the common projection dimensions age and sex. The results show that the European labor force – besides being older and “more female” – is projected to be composed of people that are significantly higher educated than today.

Contractual mandatory retirement isdely practiced in Korean firms and wage workers have to leave their main life-time job in their early 50s on average. While her population and workforce are rapidly ageing, this involuntary early retirement system poses a serious challenge to individuals' old-age income security and sustainlable growth. In this paper, we analyze the labor market process of retirement and reemployment in an event-historic perspective. We use the KLIPS(Korea Labor and Income Panel Study) - a rich panel data set that contains individuals work history and their demographic characteristics. We estimate the effects of the individual, household, and job-level determinants on the rate and path of later- work life transition and discuss implications for labor market and social policy for an ageing society

There is widespread concern about population aging affects macroeconomic variables and public sector fiscal balance, especially in Latin America. A second related issue is how the public social security system affects retirement behavior of older workers. The literature on the determinants of male retirement in developed countries is extensive. However, little is known about possible impacts of public welfare, especially in countries with large public systems of this relationship. The main explanation for early retirement in developed countries is the existence of generous pension programs and increased income and wealth of workers. However, there are several criticisms of the results presented for two main reasons: first, that the output of the elderly labor market creates jobs for younger workers and, secondly, that older workers leave the force work due to health issues. The aim of this paper is to investigate these two hypotheses for Latin America over the last two decades. The region is an interesting and important study because it has been undergoing a period of major demographic changes that have major impacts on the economy and the public pension system, and is also observing a change in the disease profile of the population that enable proper investigation of the problem.

Europe is affected by an important ageing of its population, which will gain strength in upcoming decades and will also result in an “internal” ageing of the labour force. This massive structural change raises some questions about senior's emotional well-being at work and there is a growing literature on this matter. However, some studies focused only on senior workers and do not take into account the possibility that age or ageing can have a protective effect on some psychosocial risk factors or that those risks could have an age-related stability.
This study proposes to examine the effect of age on work related psychosocial risk exposure and on their outcome. The results show a clear protective effect of old age on most of the work related psychosocial risk factors and outcomes considered in this study. For most of these variables, that effect is nonlinear. Based on the life-span theory of socioemotional selectivity (completed with a collective component), the study also propose a theoretical frame which explains the nonlinear effect of age.

With a marked ageing of its population, Europe will not only experience a decrease in the dependency ratio of workers to pensioners (which should be approximately divided by two by 2045) but also the “internal” ageing of its labour force. Face to that massive ageing, a generalised later retirement policy agenda, recommending longer active lives (linked to the increases in life expectancy) and restricting the access to early retirement or disability schemes, was adopted by Brussels (European Commission, White Paper 2012). Already implemented in some countries, measures recommended by this policy seek to increase the labour force participation of old age workers in European countries.
Based on Labour Force Surveys of 2006-2010 period, the aim of this study is to analyse, at a regional level, the role of health status on seniors (50 to 69 years old) labour force participation in Europe. This analysis focuses on the inactivity declared to be caused by illness or disability. Most of the interest of the analysis is ported on the differentiation of this state by sex, age, level of education (Isced) and population density, but mostly on its geographical variation, at national and regional levels.

China is experiencing rapid population ageing with the proportion of the population aged 65 and above projected to increase almost threefold between 2010 and 2050. The growth of the working age population is expected to stop approximately in 2015 and to turn strongly negative. China’s low retirement age compounds the ageing problem. One means to mitigate the negative effects of shrinking labour force on economic growth is to stimulate labour force participation among the current working age population. Raising the official retirement age is one strategy to encourage labour force participation.

This paper first investigates the effects of population ageing on labour force participation rates and, thus, on labour supply over the period of 2010-2030. It then estimates the effects of retirement age extension schemes on the size of the labour force. Thirdly, applying dynamic computable general equilibrium (CGE) modelling, it examines the effects of retirement age extension schemes on China’s economic growth. It finds that raising the retirement age increases effective labour input, real GDP, capital stock, household real consumption and exports. The main results are that retirement age extension is likely to boost China’s economic growth and that the urban sectors will benefit more than the rural sectors.