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The Aging Readiness & Competitiveness Report

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Productive Opportunity

Productive Opportunity

As the share of the conventional workforce— defined as working ages 15 to 64 according to the OECD— shrinks, tapping older people’s skills, experience, and, most importantly, desire, to remain productively engaged will be vital to the competitiveness of countries and the sustained prosperity of their citizens. However, with few exceptions, countries are failing to effectively unlock the productive potential of their older populations, focusing instead on narrow pension sector reforms. When experts surveyed for this report were asked which of the four pillars was in greatest need of improvement, productive opportunity was the most popular response, cited by 31 percent. Only eight percent, though, saw it as the strongest pillar and a mere six percent thought it showed the greatest improvement in recent years.

Productive Opportunity

Ageism remains a persistent obstacle to older adults’ participation in the labor force across countries. Legal protection takes different forms, but enforcement is consistently lacking due to a low level of societal awareness, difficulty proving its occurrence, and weak penalties. While no country has truly found success addressing this issue, Australia stands out for its efforts to tackle ageism systematically, and offers a model for others to follow. It is estimated that Australia loses over AUD 10 billion (USD 7.2 billion) per year as a result of people staying unemployed due to age discrimination. In 2014, a decade after passing its Age Discrimination Act, the government conducted a National Prevalence Survey of Age Discrimination in the Workplace to identify its nature and impact, and to establish a benchmark to measure progress going forward.

Narrow pension sector reforms and persistent barriers to continued employment and reemployment have made productive engagement in later life challenging for people in most countries, driven largely by financial necessity. One notable exception to this is Norway, which married pension reform with labor market flexibility and built supportive and inclusive workplaces to effectively increase both the average retirement age and work satisfaction of older workers. While boasting one of the lowest older-age poverty rates within OECD countries, Norway also has one of the highest labor participation rates, at 18.6 percent for those age 65 and older, having grown by two-thirds since 2000. Perhaps most significantly, today older workers in Norway report higher levels of enthusiasm than the general working population, citing good working environments, friendly colleagues and supervisors, quality-of-life benefits, and a feeling of purpose among the most important factors, outweighing even financial necessity.

In addition to structural reforms, there is a growing focus on entrepreneurship, which can allow for the flexibility and autonomy desired by some older workers. Costa Rica has made this the focus of its efforts. The country’s national technical university, TEC, has developed Attitude E, a free nine-month course that seeks to provide older adults the skills and motivation needed to start their own businesses. In addition, the Ministry of Labor and Social Security is working directly with municipalities and labor organizations to identify ways in which they can facilitate the continued engagement of older workers in their local economies. In 2017, it launched a five-year initiative in the municipality of Cartago to develop local networks to support entrepreneurship among older adults, providing skills development and also drawing on the significant experience gained during their careers.