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Kevin Kinsella
Chief, Aging Studies Branch,
International Programs Center, US Bureau of the Census
What’s Happening To Older Workers Globally?
It certainly is a pleasure to be here and to participate in this most
important day. I work for the US Census Bureau, which means that basically I
am a demographer; and I see it as my charge this morning not to bore you
with a whole slew of demographics because, I think, especially in this
audience, you’re all quite aware that the world is aging. I think that you
have a pretty good grasp of the underlying demographic trends that are going
on. So, what I will do is try to focus my remarks on what is happening with
older workers in a very general sense.
As we jump thirty years into the future, an age pyramid shows a bulge of
persons in the ranks of "older workers" in the developing
countries. When you look at the world as a whole, the elderly in less
developed countries are increasing or growing at a much faster rate, not
only than the elderly in more developed countries, but than the world
population as a whole. This is a fact that is often overlooked; and, I think
that it has very important impli-cations for what we will be talking about
today. Looking at the typical population pyramid that demographers are fond
of using; which is simply a graphic way of displaying an age structure
within a population, you see the typical age structure that one would find
in a developing country in anywhere from the 1950's up until today in many
cases. The base of the population pyramid, which is where all the young
people are, is enormous relative to numbers of persons at older ages, which
are represented by the higher bars on the pyramid.
If we jump ahead just thirty years, in the case of Thailand, for example,
the age structure is beginning to change. The base of the pyramid is no
longer strictly a pyramid shape. It is metamorphosing into something else.
As we jump thirty years ahead into the future, the pyramid begins to invert.
In the space of a life time (60 years), the age structure in this particular
country has gone from a very clear pyramid to something with a bulge of
persons who are in the ranks we would call today "older workers",
anywhere from about 45 up through the end of the age spectrum. I think this
is the underlying demographic change that's driving much of the concerns
that we will hear about today.
Now, it's very difficult to generalize about older workers throughout the
world; and, in fact, it's very dangerous, and I will not attempt to do so,
other than to point out what I think are a few general trends. Please
understand that there are many, many exceptions to the trends I'll be
talking about. But, if one did have to generalize, one could say that labor
force participation rates, or economic activity rates, are going down in
more developed countries, and are mixed in less developed countries. In
other words, if you look over the last 20 to 30 years, you generally find
that in Europe and North America and developed countries, labor force
participation at older ages have gone down.
There are two very distinct components to this downward trend. The first
is that most of the downward movement in labor force participa-tion at older
ages is being driven by changes among men. Women have actually been
increasing their labor force participation, at all ages, including the older
ages.
There are two very different components here. In developing countries or
less developed countries it really is a mixed bag. In Mexico, over a 20 year
period, there has been no discernible trend over time. However, one of the
major problems that we as demographers or social analysts have when we are
dealing with labor force participation in developing countries is that many
countries still do not collect very good data, or do not conceptual-ize
economic activity in the same way from country to country. I think that we
all should be very aware of the fact that even when you see a formalized,
published labor participation rate, it may or may not reflect the reality of
that country. In spite of the best efforts of the UN to prompt countries to
broaden their definitions of labor force or economic activity, there's still
an enormous variation around the world.
What else can we say about older workers? For one thing, they are much
more likely to be in agricultural pursuits than are younger workers. Another
thing we can say is that the employment status of older workers is usually
much different than that of younger workers. Older workers are much less
likely to be employees; and, they are much more likely to be self-employed.
There was clear trend toward early retirement in the 1970's and 1980's in
more developed countries. Actual retirement age is usually lower than the
so-called standard or formal retirement age as stipulated by law. There are
always exceptions, but, again, if you want to make a general statement about
retirement age in developed countries, the actual retirement age, the actual
average retirement age at which people leave the labor force, has been going
down over time. This causes a somewhat interesting phenomenon. It's
generally been assumed that, in countries that are already fairly old, such
as France, for example (old in a demographic sense), that the labor force
has also been aging. The common wisdom was that the average age of the
worker was going up; but, it turns out that this is not necessarily the
case. In France, while the percent of the population age 55 and over was
essentially stable during a 28 year period, the percent of the labor force
age 55 and over was going down. This is almost certainly a result of earlier
and earlier retire-ment. As a result, the median age of the labor force has
actually gone down a little bit bet-ween 1962 and 1990. So, this is
something that is a little bit counterintuitive, and has taken a few people
by surprise.
One other sort of gross generalization, but, I think, an important one is
that there seems to be a trend toward part-time work among older workers, at
least in developed countries. Older women are much more likely than older
men to work part-time. If, in fact, this trend continues to hold in the
1990's, then what I think we are seeing is a movement toward what has
sometimes been called "gradual retirement". It will be very
interesting to see if governments support this concept as a formal
mechanism.
How are older workers doing; and, what do the demographics suggest for
the future? Well, on the face of it, the news seems to be fairly good.
Social security coverage has expanded and continues to expand; but, of
course, it is very rudimentary in many developing countries. But, of course,
the question is not just one of simply how many countries have an old age
and survivors scheme, but how many persons or individuals within a country
are covered under any particular old age security scheme? The answer covers
the entire spectrum. It ranges from basically nil in some countries to
virtually one hundred percent in other countries. I'm sure our other
speakers will also address this issue.
Another seemingly positive development is shown by the data for the US
and Austria. What we've seen for quite some time now (at least 30 years), is
increasing life expectancy in virtually all countries of the world. When you
combine this increase in life expectancy with declining retirement age, what
happens is that people are spending a much greater proportion of their
lifetime in retirement than was the case even a half a generation ago. If
you factor in that more and more younger persons are going to high school
and college, the percent of an average lifetime spent not working maybe is
as high as half, which was sort of unheard of 30 or 40 years ago. This
sounds pretty good for those of us who are working; but, of course, it is
causing a strain on government resources, on social security resources, not
only at the old end of the age spectrum, but at the young end as well.
When it comes to retirement issues, the demo-graphics look a little bit
scary. The ratio of retirement age population to working age population in
various more developed countries, is in large part why many countries are
now revamping, or considering revamp-ing, their retirement systems and their
retirement requirements.
Finally, I would like to close with just one other future scenario; and,
this harks back to what Jeanne Smith said when she was commenting on Bernice
Bernstein, who took a somewhat longer view of the term "population
aging". When we think of aging, particularly on the International Day
of the Older Persons, I think that most of us tend to think in terms of the
growth of the elderly population in any given country. We tend to focus on
older persons, elderly persons, however we care to define that. There's
another way to think of "population aging"; and, it's especially
relevant to less developing countries. That is what might be called the
"middle aging of the population". Even though fertility rates are
coming down fairly rapidly, there are still large waves of younger people
who are moving into early adulthood. These were people who were born when
fertility rates were still high; so, you have these large waves of persons
entering the labor force. The projected growth of the labor force age
population in a 30 year period throughout all of Asia does not look all that
dramatic as a percent of the population until you consider the scale, which
is in millions of individuals. Countries in Asia will have to create an
additional 1.3 billion, not million but billion, jobs by 2020, simply to
maintain the current levels of employment that we saw in 1990. As many of
you know, those levels are not particularly high relative to what we might
think of as a good employment rate in the United States or in Europe. I will
close with the thought that maybe there will be some very severe pressures
on older workers as they struggle to stay afloat in what is going to clearly
be a very, very competitive job market in developing countries.
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