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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.