Research and Funding

Global Health and Aging

Health and Work

In the developed world, older people often leave the formal workforce in their later years, although they may continue to contribute to society in many ways, including participating in the informal workforce, volunteering, or providing crucial help for their families. There is no physiologic reason that many older people cannot participate in the formal workforce, but the expectation that people will cease working when they reach a certain age has gained credence over the past century. Rising incomes, along with public and private pension systems, have allowed people to retire based on their age rather than any health-related problem.

It is ironic that the age at retirement from the workforce has been dropping at the same time that life expectancy has been increasing. Older people today spend many years in retirement. In OECD countries, in 2007, the average man left the labor force before age 64 and could expect 18 years of retirement (Figure 13). The average woman stopped working at age 63 and looked forward to more than 22 years of retirement if they adopt similar concepts of retirement.

Many high-income countries now want people to work for more years to slow escalating costs of pensions and health care for retirees, especially given smaller cohorts entering the labor force. Most middle- and low-income countries will face similar challenges.

Other than the economic incentives of pensions, what would make people stay in the workforce longer? To start, misconceptions about older workers abound and perceptions may need to change. In addition to having acquired more knowledge and job skills through experience than younger workers, most older adults show intact learning and thinking, although there are some declines in cognitive function, most notably in the speed of information processing. Moreover, there is some evidence that staying in the labor force after age 55 is associated with slower loss of cognitive function, perhaps because of the stimulation of the workplace and related social engagement.

Even physical abilities may not deteriorate as quickly as commonly assumed. Although relatively little is known about the relationship between age and productivity (which takes wages into account), one study of German assembly line workers in an automotive plant found that the average age-productivity profile of workers increased until age 65.

Whether older people spend more years in the labor market also will depend on the types of jobs available to them. Many jobs in industrialized countries do not require physical exertion that might be difficult for an older worker, but they may necessitate acquiring new skills and retraining to adjust to changing work environments. Evidence is needed on the capacity of older workers, especially those with low education levels, to profit from retraining. Older people with limited mobility or other health problems may require more flexible schedules or adapted work environments. Considerations may need to be given to the value of building new approaches at work or institutions that will increase the ease with which older people can contribute outside of their families.

Figure 13. Expected Years of Retirement for Men in Selected OECD Countries: 2007

Bar chart showing expected years of retirement for men in 2007 in the following selected OECD countries: France (24.0), Italy (21.7), Spain (20.9), Germany (19.8), United Kingdom (18.8), Australia (18.7), OECD Average (18.1), United States (17.6), Sweden (16.7), Turkey (14.6), Japan (13.6), South Korea (9.6), Mexico (9.1).

Note: OECD average is for 30 OECD member nations.
Source: Organization for Economic Cooperation and Development. OECD Society at a Glance 2009. Available at: http://public.tableausoftware.com/views/Retirement/LFEA.

Publication Date: October 2011
Page Last Updated: March 21, 2014