As workforce dynamics evolve, there is a significant shift in the employment of the ageing population, which has far-reaching economic consequences. This article explores why the number of older individuals in the workforce is increasing, especially in the US and some European countries.

The increase in the ageing workforce has its own challenges, motivations, and economic implications that affect the policies of businesses and governments alike. By delving into the historical and recent patterns of older employment, this article provides insight into why more people choose to work in their later years instead of following the traditional retirement path.

Key Takeaways

• The workforce is ageing, with many baby boomers turning 65. They remain in the workforce mainly due to financial troubles, greater life expectancy, and the skill gap with the next generation.
• The ageing workforce faces various challenges in the workplace. These include stereotypes and biases, attendance issues, and technological advancements. 
• The rising inflation has caused massive shifts in elderly employment trends. Published in July 2023, a CNBC report predicts that older workers will exceed a quarter of the workforce by 2031.
• Iceland has the highest employment rates of older workers, followed by Sweden and Norway. Although they are the lowest in Finland and Denmark, these regions have shown the highest increase between 2019 and 2020. 
• The labour force participation rate among elderly workers is significantly lower than most other age groups. Nonetheless, they have experienced the most substantial increase in employment rates in recent years compared to any other age group.
• Some factors that affect the labour demand for older people are automation, globalisation, immigration, and age discrimination.

Key Statistics for Elderly Employment

• Between 2000 and 2010, the labour participation rate among the older population in Europe increased from 16.1% to 18.1%. This marked the first instance where it exceeded the participation rate of individuals aged 15-24, which dropped from 19.7% to 18% during the same period.
• A National Center for Biotechnology Information report shows that the percentage of all employed men (ages 60+) in the US between 2000 and 2020 rose from 7.4% to 14.8%. Meanwhile, it rose from 6.3% to 14.0% among women. 
• Around December 2022 in Belgium, the employment rates of workers aged 55-64 surged to an all-time high, hitting 56.6%.
• The employment rate of older workers in Greece in 2014 was 35.3%, which dropped to 33.9% the following year. As of December 2022, the employment rate was at an all-time high of 51.9%.
• A 2023 TurkStat report showed that the elderly population in Turkey rose by 22.6%, from 6,895,385 persons to 8,451,669 between 2017 and 2022. Consequently, the proportion of the elderly population grew from 8.5% to 9.9% during this time.
• According to a 2019 NCBI report, over half of older workers (ages 50 onwards) in the United States were employed within 6 occupational groups – management, office and administration, sales, educating and training, transportation, and production.
• The probability of being self-employed increases significantly for age groups over 65. The graph below shows the percentage of employed adults over 50. Around 24% of male adults aged 75 and above were self-employed in 2019.
• Since employment rates for older people are generally lower, they have a more flexible labour supply than younger workers. Moreover, older workers tend to deviate from their career roles and experiment with different jobs, reducing the degree of substitutability between them.

 

Is the Workforce Ageing, and Why?

Previously, individuals aged 40+ were considered part of the ageing workforce. However, with a large number of baby boomers turning 65, the older workforce now consists of individuals 55 years or older. There are various reasons why this is happening. The Academy to Innovate HR has explored these in a blog:

• Financial Troubles

The economic crisis of 2008 has countless individuals drowning in debt, forcing them to continue working past 50. Limited pension income and lack of retirement savings greatly contribute to the ageing workforce. 

• Greater Life Expectancy

In the developed world, people have adopted healthier lifestyles, increasing the life expectancy for both genders over the years. This enables them to participate in the workforce for more years. 

• Skill Gap

The generation succeeding the baby boomers is significantly smaller in number. Thus, there needs to be more people to replace those retiring, leaving employers with a shortage of skilled workers and thus employing older people.  

With an increasing older workforce come increasing new challenges like the following.

 

Ageing Workforce Challenges

• Stereotypes and Biases

The general view about old-age employees is that they are less flexible, too slow, and more prone to health problems that can hinder their workflow. Overcoming this bias is one of the trickiest challenges for the ageing workforce. 

• Attendance Issues

Absenteeism in the workplace is not uncommon among senior workers. Whether it is due to health problems or a lack of motivation, it still poses a substantial problem for companies. 

• Successions and Replacements

Elderly employees are significant in transferring knowledge to newcomers and helping them transition into the company’s work-life. However, to train the younger employees, they must postpone their retirement. Employers must wisely choose which ageing employees to keep and who to retire.

• Technological Advancements

Adapting to new technologies can be more challenging for older individuals. The growing use of computer technology in the workplace presents a real challenge for the ageing population. Typically, they are less receptive to change and find it harder to adapt to new environments and technologies.

So now that you know why the workforce is ageing, let’s delve into elderly employment trends and how they have changed over the years in response to the growing workforce. 

 

Elderly Employment Trends

Historic Elderly Employment Trends

In this section, we are going to explore the historical elderly employment trends in the USA, Europe, and some Nordic Countries. 

The United States of America

In the span of 40 years, elderly people’s (65 and older) share in the US workforce increased by 3.6%, from 3% in 1979 to 6.6% in 2019. Similarly, for people ages 55 to 64, the share increased by 5.5% during the same period.

According to Investopedia, the labour force participation rate is an estimate of the active workforce in the economy. For a certain age group, it can be calculated using the number of people working or actively seeking employment divided by the total civilian population of that age group.  

In May 2017, the US Bureau of Labor Statistics (BLS) published data indicating that, in 2014, the labour force participation rate for the older population (ages 55 onwards) was 40%. From 1970 till the 1990s, senior workers comprised the smallest section of the workforce.

However, in the 1990s, the labour force participation rate for younger age groups started declining while the numbers increased for the older age group. Thus, by 2003, older workers no longer had the smallest share.

From 2004 onwards, the participation rate steadily increased for older workers but declined for the younger workers aged 16-24 until the next decade. 

Source: The US Bureau of Labor Statistics

U.S. Labor Force Shares in Percent by Age (1970-2014) and Projected (2014-24)

 

Europe

In 2012, the European Foundation for the Improvement of Living and Working Conditions published a report on employment trends for older workers in the European Union (EU27). The report focused on the labour market status of older people (55-64) in the European Union. 

Between 2000 and 2010, the labour participation rate among the older population increased from 16.1% to 18.1%. This marked the first instance where it exceeded the participation rate of individuals aged 15-24, which dropped from 19.7% to 18% during the same period.

Only older workers had increased participation rates during this time. Although numbers were still significantly high for those aged 25-54, their participation rate dropped by 0.4% from 64.1% to 63.7%. 

Nordic Countries

Nordic countries belong to a specific geographical and cultural region of Northern Europe and the North Atlantic. The Nordic region includes Denmark, Norway, Sweden, Finland, Iceland, Greenland and Aland. 

In 2012, the Nordic Labor Journal released data concerning active older people. In Iceland, over half of the people aged 65 and above were actively working in 2012, more than any other country in the Nordic Region. The study showed that one in five Icelanders stays in the workforce past 70.

The banking crisis of 2008 heavily influenced the labour participation rate of most age groups. However, according to the Confederation of Icelandic Employers, older people have not been heavily influenced by it. This shows that Icelandic employers value their older workers more than other countries.

In light of our insights into the statistics of the ageing workforce in the past, let’s now explore how these statistics have changed in recent years.

 

Recent Elderly Employment Trends

Here is a statistical analysis of recent elderly employment trends in the USA, Belgium, Greece, Turkey, the Nordic countries, and the G7. The G7 is an informal forum of state heads and governments consisting of Canada, the UK, the USA, France, Germany, Italy, and Japan.

The G7

The rising inflation has caused massive shifts in elderly employment trends. Published in July 2023, a CNBC report predicts that older workers will exceed a quarter of the G7’s workforce by 2031. About 150 million jobs will shift to older workers worldwide by this time. 

Source: Bain Analysis

Share of Workers Aged 55 and older (2011, 2021, 2031)

USA

• Since the Great Recession, companies have been keen on hiring employees aged 50 or older. The Job Network explores how the demand for older workers is increasing annually in their article. Major fluctuations in the economy have led to poor worker security and weak pension plans. Hence, to support themselves and their families, older workers cannot retire. 

Apart from older people’s obligation to work, they are also more sought out by companies due to their experience and skill set. They show better job engagement than their younger counterparts, increased productivity, and more professionalism – all highly valued traits.

• In the last two decades, the share of employed workers ages 60 onwards in labour participation has doubled. The percentage of all employed men in this age group rose from 7.4% to 14.8%, whereas it rose from 6.3% to 14.0% among women. A National Center for Biotechnology Information report shows that most of this increase is fueled by a growing share of the workforce entering their 60s and refusing to retire due to rising inflation.  

Source: The National Center for Biotechnology Information

Age Distribution of Employed Adults in the US by Gender (2000-2020)

• The same report shows that major shifts in the ageing population in the US are the driving factor for the increase in the number of older workers. However, the labour force participation rates have changed significantly for every age group, contributing to the rise in the workforce’s average age.

As workforce participation rates among the younger population decreased between 2000 and 2010, the participation rates increased for older workers and kept on doing so until the next decade. 

Source: The National Center for Biotechnology Information

Absolute Change in Labour Force Participation (2000-2019)

• The Centers for Disease Control and Prevention released data about older workers in the US workforce. The projected age between 2014 and 2024 for age groups above 55 in the civilian workforce showed significant increases. 

Source: Centers for Disease Control and Prevention

Projected Change in US Civilian Workforce Between 2014 and 2024 (selected age groups)

Nordic Countries

The European Journal of Workplace Innovation released an article in 2021 exploring the senior employment trends in the Nordic countries. Most older employees continue working past the age of 55, contributing to a high employment rate of senior workers. The main reason for this is that the current older population has better health and education than previous generations due to improved quality of life. 

• Apart from Denmark, the employment trend for older workers has steadily increased in the Nordic region for the past 20 years. The global economic crisis of 2008 had little to no impact on the trend. Another exception is Iceland, where employment rates slightly decreased in 2018 but remained relatively higher than any other country.  

Source: The European Journal of Workplace Innovation

Employment Rates in the Nordic Countries (Ages 55-64) (2000-2019)

• Iceland has the highest employment rates of older workers, followed by Sweden and Norway. Although they are the lowest in Finland and Denmark, these regions have shown the highest increase between 2019 and 2020. 
• Employment rates in ages 55-64 have very small differences between the genders in the Nordic countries compared to other European countries. In 2019, the employment rate was 65% for older men in Finland and 69% for older women. In contrast, the employment rate in all OECD countries was 71% among older men and 54% among older women.

Employment Rates of Men and Women (55-64 years)” width=”624″ height=”320″ />

Source: The European Journal of Workplace Innovation

Employment Rates of Men and Women (55-64 years)

The employment rates for older people are higher in the Nordic countries than in any other part of Europe. This trend can be attributed to certain policies implemented in these regions. Introducing better work intensive, pension reforms, and early retirement reforms have positively impacted elderly employment trends. 

Belgium

• Trading Economics published a report in 2023 showing the employment rate of older workers aged 55-64 in Belgium. As of December 2022, the employment rates of workers aged 55-64 surged to an all-time high, hitting 56.6%. This marked a remarkable 14.9% increase from 2014.

Source: Trading Economics

Employment Rate of Older Workers in Belgium (Age 55-64)

Greece

• According to a Trading Economics report, there have been slight variations in the employment rate of workers aged 55-64 over the last decade in Greece. The employment rate of older workers in 2014 was 35.3%, which dropped to 33.9% the following year. However, it increased steadily until 2020 before slightly declining again. As of December 2022, the employment rate of older workers in Greece was at an all-time high of 51.9%.

Source: Trading Economics

Employment Rate of Older Workers in Greece (Age 55-64)

Turkey

• A 2023 TurkStat report showed that the elderly population (ages 65+) in Turkey rose by 22.6%, from 6,895,385 persons to 8,451,669 between 2017 and 2022. Consequently, the proportion of the elderly population grew from 8.5% to 9.9% during this time. However, this increase in population did not affect the workforce participation rate of older people. 
• The labour force participation rate for the elderly population in Turkey was 12.2% in 2017 and dropped to 11.3% in 2021. On the other hand, unemployment rates increased from 2.2% to 3.0% over this period.

OECD Countries

The Organization for Economic Cooperation and Development (OECD) is a unique platform consisting of 37 democratic nations with market-oriented economies that form policy guidelines to improve sustainable economic growth.

• According to AARP’s 2020 Global Employer Survey, companies with over 250 employees reported that their workers, ages 64 and above, made up 6% of the total employees.  
• The total share of older workers in the total labour force in OECD countries was 5% in 1970. Projections show that it can increase up to 8.6% in 2030 – a major shift in the composition of the workforce. 

Having firmly established the increasing diversity in the workforce, let’s now investigate the labour market for elderly workers and how it is influenced by different factors.

 

Labour Markets for Elderly Workers

The labour force participation rate among elderly workers is significantly lower than most other age groups. Nonetheless, as outlined above, they have experienced the most substantial increase in employment rates in recent years compared to any other age group.

An NCBI report extensively explores the influences on the demand for and supply of older workers. It considers the impact of the size of the older population on labour supply. On the other hand, for demand, influences of automation, globalisation, immigration, and age discrimination are considered.

Factors Affecting the Labour Supply of the Elderly – Cohort Size

The effects of the ageing population on older workers’ employment have broad implications. One of the main reasons is cohort size, which represents the size of a generation of people who were born within a certain timeframe. It is often used to examine trends and patterns associated with different age groups.

According to the report mentioned above, individuals from larger birth cohorts experience lower wages and employment rates when entering the labour market. 

However, the effects of cohort size for older workers are more complicated. 

Negative Impacts

• Some studies suggest that as workers age, the negative effects of large cohort sizes may diminish. This is partly because older cohorts are more similar in terms of experience and skill set and, hence, interchangeable.

Positive Impacts

• Since employment rates for older people are generally lower, they have a more flexible labour supply than younger workers. Moreover, older workers tend to deviate from their career roles and experiment with different jobs, reducing the degree of substitutability between them.
• Labour demand can cancel out the negative effects of cohort size on labour supply. For example, healthcare services may have an increased demand as the population ages, thus benefiting older workers. Furthermore, if different cohorts are substitutable in certain roles, a decline in the labour supply of one cohort can lead to an increase in another.

To conclude, the impact of population ageing on the employment of older workers is shaped by many factors. Cohort size, while important, may not be the sole determinant of these outcomes. 

Factors Affecting the Labour Demand for the Elderly

• Automation

While humans maintain an advantage over machines in jobs, mid-skilled workers with routine jobs are at great risk. Unfortunately, older workers are highly represented in these roles. 

Occupations with a higher rate of technology displacement include food preparation, retail sales, office clerks, stock clerks and order fillers, bookkeeping, accounting, auditing clerks, cashiers, secretaries and administrative assistants, and food servers. Older workers with lower levels of education are mostly concentrated in these roles and, thus, are most affected. 

• Globalisation

If workplaces employing older workers are negatively affected by globalisation, including trading and outsourcing, it may worsen the employment prospects of these workers. Additionally, older workers who are unable to adapt to new environments or lack the incentives to acquire new skills may be at a huge disadvantage.

• Immigration

Immigration introduces new workers into the economy. Thus, it increases the labour supply and can have lasting effects on the labour demand for older workers. 

Borjas, a renowned researcher, found that the impact of immigration is closely tied to age, mainly because older people have more working experience. However, limited research specifically focuses on how immigration affects older workers since most immigrants in recent years consist of younger individuals. 

• Age Discrimination

Age discrimination poses a significant problem for older workers during employment. There is ample evidence of discrimination against old-age individuals during hiring processes. It has led to longer unemployment spells, lower employment rates, and slower wage growth. 

Statistical discrimination, the stereotypes employers assume about older workers’ skills and abilities, has been prevalent despite being illegal in the US. Studies show that discrimination is more pronounced in older women. 

Employment Characteristics for Older Workers

According to a 2019 NCBI report, over half of older workers (ages 50 onwards) in the United States were employed within 6 occupational groups. This was a notable consistent trend since 2004 with minor variations. Some occupations, like office and administrative support, sales, and production, decreased, while others, like transportation and material moving, saw increases.

Source: National Center for Biotechnology Information

Age-wise Employment in Different Occupational Groups (2004-2019)

These trends mainly reflect the employment rates of the 50-59 age group because labour force participation significantly drops for those 60 years or older. Keeping this fact in mind, office and administrative support, sales, and education occupations had a higher percentage of workers aged 70 and over compared to those aged 50-59. However, the opposite was observed in management, production, and material moving occupations. This suggests that the second group of jobs may need to be more accommodating for older workers due to longer work hours or physical requirements. 

However, it is not necessary that more accommodating jobs always result in a higher proportion of the older workforce. Certain occupations employ a large number of workers overall. Such jobs are prevalent across all age groups.

Certain jobs are less appealing to the elderly workforce, no matter their accommodations. For example, food preparation and serving occupations are more popular among younger individuals. 

Analysing age distributions within occupational groups to identify those with a higher proportion of older workers is more helpful in the long run. Understanding these dynamics in different occupations will improve workforce planning and better accommodate the ageing population’s needs.

Job Preferences for Elderly Workers

Generally, older workers lean towards less physically demanding jobs. They seek schedule flexibility and work autonomy. According to an NCBI report, sales, service, and personal care occupations in the USA were more popular among women. On the other hand, older men preferred financial operations and technical operations.  

Many older workers shift to self-employment in the search for greater work autonomy. The probability of being self-employed increases significantly for age groups over 65. The graph below shows the percentage of employed adults over 50. Around 24% of male adults aged 75 and above were self-employed in 2019.  

Source: National Center for Biotechnology Information

Percentage of Self-Employed Adults by Gender (2004-2019)

Benefits of the Increasing Trend of Elderly Workers

The Columbia Mailman School of Public Health published a report in 2015 discussing the benefits of retaining and hiring older workers. They are discussed as follows:

• Skills and Experience

Older workers bring a lifetime of valuable work experience that cannot be taught. They possess critical thinking skills and a unique perspective that can only be acquired through years of hands-on experience. Occupations that include jewellers, embroiderers, cabinet crafters, and cheese makers require over a decade of complete training. 

• Strong Work Ethic

The elderly working population has a reputation for being work-oriented. They are usually the first ones to arrive at work and tend to prioritise it over most personal issues. They easily keep up with fast-paced work environments, stay committed to their jobs for longer periods, and seldom take extensive leaves for outings unless for health-related issues. 

• Committed 

In 2014, employees aged 55-64 had a median job tenure of 10.4 years across all industries, over three times the 3.0-year median term for workers aged 25-34. Businesses facing high worker turnover preferred to hire older workers due to their commitment to work.  

• Training the Youth

Older workers are vital for passing on their knowledge and expertise to the younger generations in the workforce. When companies face a shortage of skilled workers, they can leverage their experienced staff to train recruits. By stepping away from work momentarily, the old workers contribute to the development of the next generation of workers and compensate for the incentives they might have received for exceeding production targets.

FAQs

• Are older employees more productive than younger employees?

A PubMed survey was conducted to determine the impact of age on productivity levels. Out of 74 findings, 31% reported that younger employees were more productive in the workplace, whereas 28% reported higher productivity of older workers. However, 41% of the reports showed no differences in productivity between the two age groups.

• What percentage of adults 65 and older are employed?

A Forbes article stated that in 2020, over 10.5 million people (ages 65 and older) were still in the workforce in the US. This means that 26.6% of individuals between ages 65-74 were in the workforce, whereas 8.9% were 75 years and older. 

• Does age affect employee performance?

As a BBC News article states, job tasks that are physically demanding and require massive information processing, selective attention, sensory perception, and working memory are most likely to be affected by the age of an employee.

 

Conclusion

The trends and statistics of elderly employment reveal a dynamic shift in the modern workforce. Older people actively participate in the job market for longer periods than before as life expectancies improve and economies worsen. 

The ageing workforce faces its fair share of challenges, as explored above. However, the benefits and opportunities of the increasing trend of older workers should not be underestimated. By contributing their skills and experience, older individuals not only improve their financial states but also help overcome skills gaps in companies.

Historical and recent elderly employment trends shed light on the varying workforce dynamics in different countries. The common factor prevalent in all the regions discussed above is that elderly employment has seen a significant rise in recent years and will continue to do so in the near future.