#aging workforce

aging workforce

An aging population refers to the increasing proportion of older adults within a society due to longer life expectancy, declining birth rates, and improvements in healthcare. As people live longer lives, countries around the world are experiencing significant demographic changes that affect healthcare systems, economies, labor markets, and social services.

The brief’s key findings are:

A common concern is that an aging workforce will reduce productivity and firm profitability, yet the evidence to date is mixed.

This analysis examines the issue using a large sample from the most recent available Census data that links employees to their employers.

The results show little evidence that older workers reduce productivity or profitability, although wide variation by industry exists.

Thus, concern about an aging workforce hampering economic performance may be overblown.

Gunderson, M. (2022, April 21). Barriers to the Labour Force Participation of Older Workers in Canada. Fraser Institute. https://www.fraserinstitute.org/studies/barriers-to-the-labour-force-participation-of-older-workers-in-canada

Morley Gunderson writes: “Removing barriers to the labour force participation of older workers in Canada is of increasing importance for a wide range of reasons. … Of particular importance, given the aging workforce and our current labour shortages, is whether our pension policies create (often unintended) barriers to the continued labour force participation of older workers. … This paper identifies various barriers to the continued labour force participation of older workers.”

“The emphasis in this report is on facilitating the ability of individuals and employers to make their own choices, without being constrained unduly by barriers that can limit and distort those choices. While there may be rationales for many of the barriers, those rationales should be re-evaluated based on the changing nature of work, including such factors as the desire of many individuals to continue working and perhaps transition into retirement, and the employers’ need to address current and looming labour shortages amid Canada’s aging population and the current pandemic. Employers can also benefit by using older workers’ mentoring capabilities and skills. Policies designed for the previous world of work must be re-evaluated for their applicability to the new world of work. Pension policy is no exception.”

Additional Information

Gunderson, M. (2022). Barriers to the Labour Force Participation of Older Workers in Canada. Fraser Institute. https://www.fraserinstitute.org/sites/default/files/barriers-to-labour-force-participation-of-older-workers-in-canada.pdf

"The acceleration of the shift to online and remote learning and working brings new opportunities, but it also brings the potential for further inequities in the labor market. Older workers stand to benefit greatly from the expanded access that online and remote learning and working provides. This report documents some of the barriers and opportunities that exist for older workers accessing online programs, with a focus on their digital skill levels."

Key Findings:

"Older Americans have lower levels of digital skills (digital skills score of 257, on average), than younger Americans (digital skills score of 280, on average), and variation by subgroup is substantial. As a reference point, this gap of 23 points is equivalent to about half the gap between an individual who can complete a task by navigating across web pages or applications and someone who cannot.

Older Americans from historically oppressed groups (i.e., people of color and women) have lower levels of digital skills than older white workers. Among those over 50, white Americans are most likely (18 percent) and Black Americans are least likely (3 percent) to be digitally literate.

Older Americans who have basic digital skills or who are digitally literate have, on average, higher numeracy and literacy skills than younger Americans, underscoring just some of older workers’ assets.

Older Americans with better computer and internet access have higher levels of digital skills than older Americans who do not, but their digital skills are still lower than younger Americans even when they have access.

Older workers with more digital skills have significantly higher earnings than those with less and are better positioned to compete for the jobs of the future."

Urban Institute, September 14, 2021: Digital Skills and Older Workers: Supporting Success in Training and Employment in the Digital World, by Ian Hecker, Shayne Spaulding, and Daniel Kuehn (24 pages, PDF)

"[T]he labour force of the future will be quite different from the past due to immigration and aging. Immigrants will account for all of Canada’s future population increase, and immigrants have historically chosen to settle in only a few large cities. Canada’s aging population has several implications. While many will retire, others will stay active but only on their own terms, including flexible hours and more part-time work and self-employment. This will make finding and keeping workers challenging for large employers, especially in the union-dominated public sector. The greater problem for our society is therefore more likely to be chronic labour shortages than mass unemployment caused by automation and technology."

"However, as noted in a new study published by the Fraser Institute, a slowdown in labour force growth is not inevitable. Labour force growth accelerated between 1996 and 2006. At that time, severe labour shortages in parts of the country led employers to offer higher wages and recruit groups previously overlooked (such as the disabled and older workers), resulting in higher labour force growth and a more diverse workplace without government intervention. In western Canada at the peak of the oil boom in 2008, employers adopted a number of creative means to entice workers to join the labour force, delay retirement and work longer hours to supply the required labour. If future labour force growth does not meet requirements, employers may be just as creative in finding the labour input they need."

"But again, labour force growth in not inevitable. And Canada can also influence other determinants of growth, namely the stock of capital and productivity. On the capital front, several policies could help raise investment, including lowering effective tax rates, easing regulatory restrictions, promoting internal trade, encouraging more competition and business formation, and allowing resource developments (including pipelines) to proceed. It’s even easier to improve productivity growth. A wide range of existing technologies have the potential to boost productivity including robotics, artificial intelligence, nanotechnology, quantum computing, biotechnology, the 'Internet of things,' advanced wireless technologies, 3D printing and driverless vehicles. The pandemic clearly accelerated the adoption of some technologies, especially those related to communications and online banking."

Fraser Institute News Release, May 3, 2021: "Canada’s aging labour force threatens COVID recovery and future prosperity," by Philip Cross

Fraser Institute, April 22, 2021: The Implications of Slowing Growth in Canada’s Labour Force by Philip Cross (13 pages, PDF)

Older Americans who face discrimination on the job can’t rely on the courts as much.

Washington DC (ProPublica) – At the age of 50, the federal law that seeks to protect older American workers from age bias has been enfeebled by court decisions that have widened loopholes for employers and narrowed the ways employees can seek redress.

When Congress enacted the Age Discrimination in Employment Act (ADEA) in 1967, the law was treated as something of an addendum to the Civil Rights…