Iceland leads older workers index

Iceland is the best country in the OECD for harnessing the potential of older workers, according to a report by PwC.

The firm’s latest Golden Age Index, which ranks countries according to the labor market impact of workers over 55, puts Iceland, New Zealand, and Sweden in the lead, followed by Israel, Norway, and Chile.

With the exception of the Nordic countries, Europe performs relatively badly, with potential consequences for its economy. PwC estimate that if the UK—which it places in the middle of the index—performed as well as top-ranking EU member state Sweden, it could boost its GDP by 5.4% or £100 billion.

Since the previous index was compiled in 2007, Greece and Turkey have fallen farthest in the rankings, with Turkey now in the lowest position of the 34 OECD member states.
The index takes into account a range of factors including the employment rate among older age groups, the employment gender gap, incidence of part-time work, earnings, and training.

PwC makes a range of policy recommendations to help governments realise the benefits of an older workforce. These include pensions reform allowing for later retirement, training for older workers, and financial incentives for returning to or staying in the workforce.

The economic impacts of older workers is analyzed in several IZA World of Labor articles. René Böheim has written for us about the effect of early retirement on youth employment, arguing that “increasing effective retirement ages and policies to foster employment of older workers are likely to support the employment of both older and younger workers”.

Elsewhere, in his article on training for older workers, Matteo Picchio writes that: “Encouraging people to work longer and fostering the employability of older workers have become priorities for policymakers. Training specifically designed for older workers might help attain these goals, since it may refresh human capital and reduce the pay–productivity gap. Training older workers might also benefit employers and society as a whole."

Finally, Carol Graham has written about late-life work and well being. She suggests that: “Flexible arrangements and retirement options are a potential solution for the challenges of unemployment, aging populations, and unsustainable pension systems around the world.”

Read more coverage of this story at the Telegraph and the New Zealand Herald. The PwC Golden Age Index can be found here.

Related articles:
The effect of early retirement schemes on youth employment by René Böheim
Is training effective for older workers? by Matteo Picchio
Late-life work and well-being by Carol Graham