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Supporting ageing workforce key to tackling future US economic challenges

 

24/01/2018 – Providing American seniors with better work incentives and opportunities will be crucial for the United States to meet the challenges of its rapidly ageing population. By 2028, more than one in five Americans will be aged 65 and over, up from fewer than one in six today, according to a new OECD report.


Working Better with Age and Fighting Unequal Ageing in the United States
finds that employment rates among older workers in the United States are above the average across OECD countries. In 2016, 62% of all 55-64 year olds were employed compared with the OECD average of 59%. However, employment rates are much lower among some older population groups. Early retirement is prevalent among workers from vulnerable socio-economic backgrounds, often occurring as soon as Social Security benefits become available at age 62. Poverty among seniors is a challenge: more than 20% of peopled aged 65 and over have incomes below the relative poverty line – defined as half of the median disposable household income – compared with the OECD average of less than 13%.

“More needs to be done to promote greater inclusiveness at old age and foster better, longer working lives for all Americans. A comprehensive policy approach is needed to help individuals overcome disadvantages over their life course,” said OECD Secretary-General Angel Gurría, launching the report at the World Economic Forum in Davos. “This could both help reduce old-age poverty and strengthen public finances by reducing public outlays on Social Security.”

The report stresses the importance of fostering more flexible transitions to retirement, for example through a combination of part-time work and pension incomes. This can help older workers to remain employed longer. Currently, however, only around 40% of older workers in the United States aged 65 and over are working part-time compared with over 65% in OECD countries such as Germany and the United Kingdom.

Among its other recommendations, the OECD suggests the following approaches:

  • Promote well-informed choices between work and retirement.
    Provide easily understandable information – especially to seniors with poor financial literacy – about the financial implications of early or late retirement.
  • Support businesses in providing older workers with good jobs.
    With relatively little employment protection and no mandatory retirement age, the willingness of US firms to hire and retain older workers is key to better employment opportunities for older workers. The experience of other OECD countries can help key stakeholders in the United States identify best practices in the private sector to recruit, retain and retrain older workers. For instance, according to the Fuller Working Lives Business Strategy Group in the United Kingdom, it is crucial to improve awareness of line managers of issues affecting older workers’ employment, so that they can provide effective support.
  • Provide equal opportunities for workers to upgrade their skills throughout their working lives.
    For workers in their mid-to-late careers, training and upskilling is essential to foster inclusive employment. The digital transformation makes this even more important. If no action is taken, the prospects of future generations of older workers in the United States and of US economy at large would be negatively impacted.

For further information, journalists are invited to contact Johanna Gleeson in the OECD Washington Center (Johanna.Gleeson@oecd.org / +1 202 822 3866).

Working with over 100 countries, the OECD is a global policy forum that promotes policies to improve the economic and social well-being of people around the world.




Boosting skills would drive UK growth and productivity

 

19/11/2017 – The United Kingdom has record-high employment levels and very low jobless rates compared to most OECD countries. However, labour productivity growth remains weak and the job prospects of many adults are hurt by their poor literacy and numeracy skills. To boost growth, productivity and earnings, the UK should encourage lifelong learning among adults and promote better skills utilisation, according to a new OECD report.

Getting Skills Right: United Kingdom says that educational attainment has been rising in the UK, with 42% of adults having a tertiary degree, compared with 34% across the OECD. Sixteen per cent graduate in the field of sciences, more than in any other OECD country, and nearly half of science graduates are women.

The share of young adults enrolled in vocational education and training has risen to 43% but remains lower than in many other European countries. Apprenticeships are also less popular, pursued by around 24% of upper secondary students, compared to 59% in Switzerland or 41% in Germany.

Recent reforms to the regulation of apprenticeships should bring training content more in line with employer needs. The new apprenticeship levy should also encourage employers to take more responsibility for training, but  care should be taken to prioritise quality of apprenticeship training to discourage employers simply rebadging existing training as an apprenticeship, according to the report.

Challenges remain in matching skill supply with skill demand in the UK. A high proportion of jobs remain low-skilled while the proportion that are high-skilled remains low relative to the increasing supply of workers with higher level qualifications. Among the countries covered by the OECD Survey of Adult Skills, the UK is only behind Spain in terms of the share of jobs that require lower-level qualifications (22%) while demand for higher level qualifications falls short of supply, with only a third of jobs requiring a tertiary education.

About 40% of British workers are either over-qualified or under-qualified for their job, and the same number are working in a field of study different to the one in which they studied in school.  Furthermore, the OECD Skills for Jobs database reveals shortage pressure in knowledge related to education and training, health services and STEM subjects. More efforts are needed to improve skills utilisation and to stimulate innovation and growth in knowledge sectors, says the report.

Among the OECD’s recommendations are that the UK should:

Strengthen career guidance services. There should be more interactions between employers and secondary schools and access to career guidance services should be extended to cover employed workers as well as the unemployed.

Encourage lifelong learning. Advanced Learner Loans could be made more attractive for low-skilled workers by tying repayment waivers to employment in some shortage occupations. Personal learning accounts or paid training leave for in-demand skills could also help.

Enhance awareness about the value of training. More efforts need to be made to convince employers of the return on investment of training. Group schemes may also encourage more small and medium-sized firms to offer training.

For more information, journalists should contact Katharine Mullock of the OECD Skills and Employability division (tel. + 33 1 45 24 19 17) or the OECD Media Division (tel. + 33 1 45 24 97 00).

Working with over 100 countries, the OECD is a global policy forum that promotes policies to improve the economic and social well-being of people around the world.