The International Day of Older Persons, commemorated every year on October 1st, highlights the contributions of older individuals to our communities and the economy. It also draws the attention to both the opportunities presented by longer life spans and the challenges associated with them. To accelerate our quest for solutions to these challenges, the UN declared 2021-2030 the Decade of Healthy Ageing. This global initiative, led by WHO, aims to improve the lives of older people, their families, and their communities through concerted and catalytic actions.
Population ageing is one of the main global population trends today. In virtually every country, the size and share of the older population are rising, and the trend is expected to continue for decades. This shift is driven by increased life expectancy and declining fertility rates. Currently, more than 60 per cent of the world’s population lives in countries where fertility rates have dropped below replacement level (2.1 live births per woman). Globally, life expectancy increased by more than six years between 2000 and 2019, from 66.8 years to 73.4 years, though the pandemic caused it to drop to 71.4 years in 2021.
Still, the global population aged 65 or above more than doubled in the past few decades, from 324 million in 1990 to 761 million in 2021. This number is projected to double again by 2050, reaching 1.6 billion. Similarly, the population aged 55 to 64 is growing rapidly, and the population aged 80 or above is growing even faster.
The ageing population has significant implications for the world of work, begging the question of how well-prepared labour markets and social protection institutions are to support older workers. The 2030 Agenda for Sustainable Development, which promises to “leave no one behind”, includes seniors, who deserve at the opportunity for decent work, dignified retirement, well-being, and a good quality of life. Whether out of choice or need, many seniors continue to participate in the labour force but often struggle to find appropriate job opportunities. This blog focuses on seniors’ labour force participation and labour underutilization to uncover the various (sometimes hidden) forms it can take.
Increasing retirement age and senior labour force participation
According to the latest World Social Protection Report, in 2023, 79.6 per cent of people above the statutory retirement age in the world received a pension. Although this global figure seems encouraging, it masks great disparities: only 12.7 per cent of those above retirement age received a pension in low-income countries compared to nearly universal coverage (96.8 per cent) in high-income nations. Furthermore, it fails to convey any information on the level and adequacy of these pensions.
Increasing retirement ages have become a prevalent measure taken around the world to address the sustainability of pension systems. However, doing so requires a comprehensive approach that considers broader social, economic, labour market, and health-related factors.
In 1995, people aged 55 and above represented 19 per cent of the world’s working-age population, compared to 24.8 per cent in 2020. Just as the population is ageing, so is the labour force: people aged 55 and above represented 10.9 per cent of the global labour force in 1995, compared to 16.3 per cent in 2020. This shift is happening faster than the growth of their working-age population, possibly reflecting the inadequacy of pension amounts or the prevalence of informality.
While the global labour force participation rate is declining due to many factors, including the increased and prolonged participation of youth in education, the participation rate of near seniors (aged 55 to 64) rose by 7 percentage points between 1992 and 2022. Notably, women in this age group saw an increase of 12.3 percentage points, compared to 1.7 points for near-senior men, reflecting the increased female labour force participation decades ago as these women now reach near-senior ages.
Seemingly contained unemployment of seniors
While unemployment among older workers is generally low, this is not unmitigated good news for seniors. Workers aged 65 and above have the lowest global unemployment rate (1.4 per cent), followed by near seniors aged 55 to 64 (2.5 per cent). In contrast, the global unemployment rate of prime-age workers aged 25 to 54 is 4.5 per cent, and that of youth aged 15 to 25 is 13.3 per cent. This age-based decline in unemployment rates holds true across country-income groups.
However, seniors face other challenges. While unemployment rates may be lower, those who are unemployed tend to struggle more. In 62 per cent of countries with available data, the share of long-term unemployed is larger for people aged 55 and above than for people aged 25 to 54. In fact, when becoming jobless, seniors tend to leave the labour force altogether rather than job-seeking. Seniors face strong hurdles in their job search, including age discrimination, lack of job-search skills and support, real or perceived outdated skills, real or perceived higher working-conditions expectations, and less geographic mobility. Indeed, the ratio of discouraged jobseekers to unemployed is higher for ages 55 and above than for ages 25 to 54 in 92 per cent of countries with data.
Moreover, the COVID-19 pandemic hit older workers harder than younger groups. In about half of the countries with data, the 2020 surge in unemployment was more severe for seniors aged 55 and over than for prime-age workers aged 25 to 54. On average, unemployment increased by 90 per cent for seniors compared to 30 per cent for prime-age workers.
A more comprehensive picture of seniors’ labour underutilization
Labour underutilization goes beyond unemployment. It includes time-related underemployment (when working hours are fewer than what the worker wants and is available for) and the potential labour force (those outside the labour force who are available for or seeking employment, but not the two simultaneously). Data shows that seniors and near seniors are less exposed to labour underutilization than other age groups. However, their labour underutilization is still significant.
ILO calculations based on data covering 157 countries indicate that, globally, 51.7 million people aged 55 and above are in labour underutilization. There are 22.6 million in time-related underemployment, 15.4 million in unemployment, and 13.7 million outside the labour force but available or seeking employment.
The global composite labour underutilization rate (covering unemployment, time-related underemployment, and the potential labour force) is 8.1 per cent for seniors aged 55 and above, rising to 13.2 per cent in low-income countries. Furthermore, labour underutilization rates are higher for women aged 55 and above than for their malecounterparts, pointing to increased difficulties of older women in the labour market.
When looking into the composition of labour underutilization by its three components (unemployment, time-related underemployment, and the potential lalbour force), we note that prevalence of unemployment is the lowest for ages 55 and above compared to other age groups, while that of time-related underemployment is the highest, once again pointing to the diversity of labour market hurdles faced by older workers. The predominance of time-related underemployment among forms of labour underutilization of older workers is particularly striking in low-income countries, suggesting insufficient or inexistent social protection nets and other forms of financial support push the elderly to come up with any job possible, however inadequate. Also, after time-related underemployment, unemployment is the second most prevalent form of labour underutilization for men aged 55 and above, while for women, it is the potential labour force (the form of labour underutilization with the weakest labour market attachment).
Beyond labour underutilization
This blog focused on labour underutilization among older workers. but their work situation and well-being is shaped by many other factors, such as job quality, socioeconomic context, the strength of social protection systems, and household dynamics.
Moreover, older workers contribute to society through paid work but also unpaid activities, such as subsistence farming or caregiving, which are often overlooked.
To truly improve the quality of life for older workers, policymakers must consider the full spectrum of their contributions—both paid and unpaid—and address the diverse challenges they face. Only then can we ensure a more inclusive and supportive labour market for all.
