Amid a general concern – and rightly so – about youth unemployment, there is another reality that is going almost unnoticed: the share of those over 55 that are not working. Some of them are unemployed, others are retired or out of the labor market.
The first thing worth noticing when looking at this data is the enormous variety across countries. The second one is that this variety is not only the result of the current crisis. Data from 2007 shows that OECD countries did not present big differences in employment rates for the general population, but differences became huge when considering only those workers aged 55 and over. Countries such as Iceland, Sweden or Norway had about 70 percent of their population aged 55 to 64 employed while the rate for Spain, Belgium or Greece fell below 45 percent. This is precisely the segment of population that is going to experience the largest growth in the coming decades according to demographic projections.
In a context of rapidly aging societies, this is a picture that our countries cannot afford.
A big part of the story is related to labor market characteristics such as the existence of part-time jobs, which are quite popular among golden workers. But a part is also related to the incentives of existing pension systems, such as whether or not pensions depend only on how much workers earn during their last few years of employment.