The Economic Prospects of Growing Older

The OECD has been studying the issue of aging and the economic realities surrounding it. This is a very relevant issue for economic development. My question is "what are we doing about it from an ED standpoint?" From what I can tell, we are doing nothing. Maybe we should give some attention to this issue. Here is what the OECD is saying.

Nearly all OECD countries face the need to reform their pensions system. Some have already taken steps, while others are getting ready to. Reforms are necessary to ensure the sustainability of pay-as-you-go schemes. But this is only one part of the equation. Pension reform needs to go hand in hand with changes in the behaviour and attitudes of all actors involved to promote a longer working life.

There are essentially three aspects to this issue:

1. If nothing is done quickly to extend working lives, living standards will fall in the course of the coming decades. We know, because of the ageing of our populations, that there will be fewer and fewer persons of working age to support more and more older people. For the OECD as a whole, the dependence ratio of older people (i.e. those aged 65 and over as a proportion of those aged 20-64) will rise from the current figure of 22%, to 46% in 2050. In these circumstances, it is essential to have as many people working as possible - young people, women and especially older workers.

2. This is not an insurmountable challenge. Most countries have considerable manoeuvring room to increase the employment rate of persons between age 55 and 64. The average rate in the OECD is currently 48% -- varying from 25% or less in France and Belgium, to 70% in Switzerland.

3. While it is desirable for older workers to remain in the labour market, steps must be taken to ensure that they have real employment prospects. Their jobs must be of sufficient quality to encourage them to stay on for an extended period. This requires a veritable change in attitude on the part of all the actors concerned.

At 52, I have some growing passion about this issue. These issues matter in every community in America. We need to do our part in addressing it.

Read more here.