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Age-related workplace barriers could cost Organisation for Economic Co-operation and Development (OECD) economies nearly $500 billion in cumulative productivity losses by 2040, the World Economic Forum and Marsh said in a new report, as ageing populations grow far faster than the working-age workforce.
OECD economies refer to the 38 member countries that are highly developed, democratic, high-income nations that operate on free-market principles. "OECD countries, it is estimated, will suffer nearly $500 billion in productivity losses by 2040, due to under- and unemployment of adults aged 55+ relative to younger workers," the report finds. The losses are tied to longer unemployment spells and structural barriers that push many older adults out of the labour force entirely. The demographic pressure is intensifying. "By 2040, the global population aged 65 and over will grow by more than 50 per cent, increasing from 856 million to 1.3 billion. Meanwhile, the working age population, aged 25 to 64, will grow by just 13 per cent," the analysis notes. The cost is already visible country by country. Between 2025 and 2040, extended unemployment among workers aged 55+ is projected to cost the US $113 billion and France $106 billion in cumulative GDP losses. In Canada, the estimate reaches $7,530 million. Other major impacts include the United Kingdom $25,590 million, Brazil $105,810 million, Netherlands $26,250 million, and Japan $5,870 million. Beyond GDP, the report links ageism to health impacts. "Research suggests that ageism is linked to 17 million incidences of disease in the United States alone." In 2018, ageism added at least $63 billion in extra health costs in the US alone, with studies also showing links to depression, physical illness and reduced access to healthcare. The WEF says the problem is worsened because many discouraged older workers exit rather than appear in unemployment data. "These figures are just the tip of the iceberg. Many people who feel disadvantaged due to ageism simply choose to exit the workforce and do not appear in the unemployment figures." The report points to alternatives. It highlights that multigenerational teams "fuel growth and productivity through higher levels of creativity and innovation," and that experienced employees can mentor younger colleagues while gaining digital skills in return. It also cites policy examples. South Korea saw a record 70 per cent employment rate for adults aged 55 to 64, and Japan has seen employment levels for workers over 65 increase for 20 consecutive years. In Europe, Sweden's flexible pension system lets people take 25 per cent to 100 per cent of their pension while continuing to work. "Tackling ageism can boost productivity, provide health and wealth benefits to individuals and reduce financial reliance on governments. It also provides an opportunity for employers to access under-used skills and experiences of a valuable - and growing - cohort of society," the report concludes. (ANI)
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