Helga Hejny, Ph.D. Middlesex
University
Implications of
population ageing for
the labour market
Implications of
population ageing for
the labour market
The structure of the presentationThe structure of the presentation
• The demographic ageing problem
• Young and older workers: the lump of labour
fallacy
• The youth unemployment: UK and Italy
• The European policies
The demographic ageingThe demographic ageing
Three main factors of an aged workforce:
Low birth Low
mortality
Asymmetrical age structure =
ageing workforce
Higher life
expectancy of
older people
The composition of the workforce: projected working
age population and total employment EU25
Young and Older workers: the lump of
labour fallacy
Young and Older workers: the lump of
labour fallacy
The impact of the ageing population:
•Productivity
•Economic growth
Member States pressures:
DEMOGRAPHIC CHANGE
���� Rising pension costs
ECONOMIC RECESSION
���� Unemployment
Vulnerable workers:
�Young workers: “last-in-first-out principle” the last to
be hired and the first to be dismissed
�Older workers: “ageism” reinforces a negative image of
older persons as dependent people with declines in intellect, cognitive
and physical performance
GOVERNMENTS RESPONSES:
-Increase participation rate - raise the retirement age
- increase taxes for pension costs
“THE LUMP-OF-LABOUR FALLACY”:
The amount of work available to labour is fixed
�The amount of work is not static
�Older and younger workers hold different
characteristics
REACTIONS TO THE
GENERAL ECONOMIC CONDITIONS OF A
COUNTRY
The youth unemployment: UK and
Italy
The youth unemployment: UK and
Italy
UK: Pension reforms (1980/1990) motivated by public
finance considerations rather that unemployment.
Today severe youth unemployment trend:
•May-July 2012, 1.02 million young people (aged 16-24)
unemployed (37,000 more than the same quarter in 2011)
•June 2010 show that 19,6% of young people under 25 are
unemployed
THE HIGHTEST YOUTH UNEMPLOYMENT RATE IN 17 YEARS
The general causes:
� Financial Crisis
� Public Sector cuts
� Lack of qualifications
� Lack of experience
The general causes:
� Financial Crisis
� Public Sector cuts
� Lack of qualifications
� Lack of experience
ITALY: Has the second oldest population in the
European Countries. The Italian pension spending
higher than in any other western industrial country
even after the reduced incentives for early
retirement.
Some critics:
-Some apprenticeship schemes do not encourage
permanent contracts
-Short-term contracts that rarely lead to long-term
contracts
Italy has the second
oldest population in
the European Union
countries, with one in
six citizens aged over
65
Italy has the second
oldest population in
the European Union
countries, with one in
six citizens aged over
65
Those who are over 80
represent 5.6% of the
entire population
Those who are over 80
represent 5.6% of the
entire population
the Italian youth unemployment
rate has increased from 24% in
2007 to about 32% in 2011 and
jumped to 39.3% in 2012
the Italian youth unemployment
rate has increased from 24% in
2007 to about 32% in 2011 and
jumped to 39.3% in 2012
The European policiesThe European policies
European Strategy:
“ Youth- Investing and Empowering”
The strategy follow up to the renewed social agenda announced
by European Commission 2008
Youth
education
Youth
educationEmploymentEmployment
European Commission in 2011: Recommendation
for the Euro Area for SMART, SUSTAINABLE and
INCLUSIVE GROWTH
�pension system, unemployment, education and
training, , fighting segmentation, taxation system
ConclusionsConclusions
Increase in educational level not only for young
workers but for older workers
More balance between older and younger
workers : avoiding age discrimination in
employment
� Combat economic crisis keeping active the
two workforce cohorts
THANK YOU!THANK YOU!
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