Responding to demographic challenges.

On 9 July, the Organisation for Economic Co-operation and Development (OECD) published its annual Employment Outlook on the latest developments and prospects for the labour market in OECD member states. This edition focuses on the challenges posed by demographic change for future living standards and social cohesion.

According to the report, demographic change threatens to cause a noticeable slowdown in gross domestic product (GDP) per capita growth in most OECD countries unless countermeasures are taken quickly. At the same time, however, the report also shows how this decline can be offset. The focus is on increasing the labour force participation of healthy older people, women and migrants. This requires targeted investment in people's skills and employability throughout all stages of life.

The ageing population will shape the future of labour markets

Declining birth rates and rising life expectancy are leading to an ageing population in OECD countries. However, without further policy measures or behavioural changes, demographic ageing will significantly hamper economic growth and the ability of OECD countries to further improve their standard of living. According to OECD calculations, without a significant increase in productivity growth. GDP per capita growth in the OECD area would slow down by about 40 per cent. This would further restrict the scope for redistribution between the working population and older people in the future.

Economic growth is important for social security

Rising GDP per capita is crucial to ensuring that social security can be financed in the long term, especially in view of demographic change. It means more economic power per person. This increases contribution payments without having to raise contribution rates. Higher growth makes it easier to maintain or expand benefit levels (e.g. pensions or healthcare) without shifting the burden of contributions onto younger people.

Lifelong investment in skills and employability

The authors emphasise that people around the world are living longer and healthier lives than ever before. This is a significant accomplishment, offering the opportunity to retain older workers for longer while they remain in good health. This decline in GDP per capita growth could be offset by increasing labour force participation among older people. However, this would require a lifelong investment in employees' skills. Key starting points here are continuing education and training, as well as occupational health and safety measures. Further innovative approaches are needed to help women, migrants and older people maintain their physical and mental health, and to motivate them for a longer working life.

Combating discrimination

Negative stereotypes about ageing persist. As a result, older employees all too often have less access to training opportunities or flexible working arrangements, even though they have important experience and skills to offer. The authors believe that politicians and social partners have a responsibility here. Public campaigns, inclusive recruitment practices and anti-discrimination measures are important here. Social security also has a role to play. Through rehabilitation measures and occupational health and safety, it already makes a significant contribution to the employability of older workers. In addition, pension insurance enables a flexible transition from working life to retirement, thereby encouraging people to continue working beyond the statutory retirement age.