Older people and skills in a changing economy
The ageing of the population has major implications for the economy, for labour supply and employer behaviour, as a growing retired population is supported by a shrinking workforce. Employers are increasingly recognising the need to make work more attractive to older people; despite recession older people are staying longer in work; which Government policy encourages. This paper provides an overview of the distinctive features of the older labour market and identifies policy issues which need to be addressed if we are to make effective use of older workers in future.
Equality Briefing Paper – Old People and Skills in a Changing Economy (PDF, 1.1 Mb)
Published September 2011
This is one of a series of briefing papers in an equality series assessing the different dimensions of skills in a changing economy. Here the focus is on ageing. The aim is to provide insight and understanding into the skills related challenges, needs and opportunities for individuals who are disadvantaged in the labour market. The emphasis is on new and recent evidence since 2005.
Government is encouraging people to stay in work longer, through a variety of incentives and regulatory changes. Some employers are also changing working practices to make work more attractive to older people. Most older people recognise the need to work longer, and a substantial proportion say they are willing to do this. Since 2000, the labour market participation rates of people over 50 (65%) and especially over 65 have been rising, and the number of older people working is the highest since records began.
Employers are willing to retain experienced older people, they are much more reluctant to recruit them. As a result, the labour market becomes increasingly inflexible after 50 with many people locked into the same job for many years or unable to find employment.
Over qualification and underemployment is a significant issue for those aged over 50.
Two groups leave the labour market between 50 and 59: the low paid and skilled are driven out by redundancy and ill health; and the highest paid to retire to pursue other interests. Caring responsibilities also lead many people, mostly women to leave. Between 60 and 64 most people leave though average retirement ages are rising (64.5 for men and 62 for women). Those remaining are increasingly likely to be working part-time, in low skilled work, in professional or managerial roles, or in skilled trades. After 65, the workforce is increasingly concentrated in a few sectors. With age, the proportion though not the numbers in self employment rise, though this is often through necessity rather than choice.
This highlights significant issues related to skills demand and the functioning of the labour market which will become more pronounced over time.
This paper is one of a series of five Briefing Papers on equality and skills, which include:
- Disability and skills in a changing economy
- Gender and skills in a changing economy
- Low skills and social disadvantage in a changing economy
- Older people and skills in a changing economy
- Spatial inequality and skills in a changing economy
Other recent research in this area includes:
The Youth Inquiry (UK Commission 2011) explored questions around the unemployment, recruitment and employer perspectives of young people.
In May 2011, Joseph Rowntree Foundation published ‘Poverty and ethnicity: a review of evidence’ and is launching a fuller programme of in this area.
