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Live longer, work longer : making it happen in the labor market

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  • Vodopivec, Milan
  • Dolenc, Primoz

Abstract

The objective of the paper is to summarize labor market implications of population aging and to discuss policy options to increase the employment of old workers. The paper argues that population aging and ensuing shrinking of the workforce will create a significant drag on the economies of developed, transition, and even some developing countries. Thus working longer is an imperative: unless countered by productivity increases, working longer, or both, population aging and ensuing shrinking of labor force will reduce economic growth and may jeopardize the economic well-being of some of the elderly. However, extending working lives has proven difficult, both because workers do not want to work longer and because employers are lukewarm about employment old workers. Among measures to motivate workers to work longer, the paper proposes providing retirement incentives and attractive, flexible working arrangements; and to stimulate employers to hire old workers, it argues for removing obstacles imposed by restrictive labor market institutions, for increasing human capital of workers via life-long learning, and for addressing age discrimination. Chances for extending working lives will also increase with improving health of old workers. The organization of the paper is as follows. Section 1 discusses the implications of population aging for economic growth. Section 2 examines factors that stand in the way of longer working lives - why workers opt for early exit from the labor market, and why employers are often lukewarm about employing old workers. In the policy part of the paper, Section 3 proposes possible measures to attract workers to work longer, and Section 4 describes how to remove institutional obstacles and introduce incentives that would make old workers more appealing to employers.

Suggested Citation

  • Vodopivec, Milan & Dolenc, Primoz, 2008. "Live longer, work longer : making it happen in the labor market," Social Protection and Labor Policy and Technical Notes 42471, The World Bank.
  • Handle: RePEc:wbk:hdnspu:42471
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    References listed on IDEAS

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    9. Milan Vodopivec & Primoz Dolenc:, 2008. "Live Longer, Work Longer: Making It Happen in the Labor Market," Financial Theory and Practice, Institute of Public Finance, vol. 32(1), pages 65-81.
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    Cited by:

    1. Piggott, John & Sane, Renuka, 2009. "Indexing pensions," Social Protection and Labor Policy and Technical Notes 52445, The World Bank.
    2. Milan Vodopivec & Lilijana Madjar & Primoz Dolenc, 2009. "Non-performance of the Severance Pay Program in Slovenia," Financial Theory and Practice, Institute of Public Finance, vol. 33(1), pages 89-102.
    3. Almeida, Rita & Carneiro, Pedro, 2009. "Enforcement of labor regulation and firm size," Journal of Comparative Economics, Elsevier, vol. 37(1), pages 28-46, March.
    4. Woo, Kye Lee, 2009. "Productivity increases in SMEs : with special emphasis on in-service training of workers in Korea," Social Protection and Labor Policy and Technical Notes 51251, The World Bank.
    5. Vodopivec, Milan & Arunatilake, Nisha, 2008. "Population aging and the labor market : the case of Sri Lanka," Social Protection and Labor Policy and Technical Notes 44927, The World Bank.
    6. Woolford, Geoff, 2009. "Social protection for migrants from the Pacific Islands in Australia and New Zealand," Social Protection and Labor Policy and Technical Notes 49174, The World Bank.
    7. Ferrer, Ana M. & Riddell, W. Craig, 2009. "Unemployment insurance savings accounts in Latin America : overview and assessment," Social Protection and Labor Policy and Technical Notes 49173, The World Bank.
    8. Milan Vodopivec & Primoz Dolenc:, 2008. "Live Longer, Work Longer: Making It Happen in the Labor Market," Financial Theory and Practice, Institute of Public Finance, vol. 32(1), pages 65-81.
    9. Milan Vodopivec, 2013. "Introducing unemployment insurance to developing countries," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-23, December.
    10. Almeida, Rita & Carneiro, Pedro, 2009. "The return to firm investments in human capital," Labour Economics, Elsevier, vol. 16(1), pages 97-106, January.
    11. Holzmann, Robert, 2010. "Bringing Financial Literacy and Education to Low and Middle Income Countries: The Need to Review, Adjust, and Extend Current Wisdom," IZA Discussion Papers 5114, Institute for the Study of Labor (IZA).
    12. James, Estelle, 2009. "Rethinking survivor benefits," Social Protection and Labor Policy and Technical Notes 52919, The World Bank.
    13. Chae, ChangKyun & Chung, Jaeho, 2009. "Pre-employment vocational education and training in Korea," Social Protection and Labor Policy and Technical Notes 52186, The World Bank.
    14. Makhema, Mpho, 2009. "Social protection for refugees and asylum seekers in the Southern Africa Development Community (SADC)," Social Protection and Labor Policy and Technical Notes 49168, The World Bank.
    15. Alvaro Forteza, 2010. "The Portability of Pension Rights: General Principles and the Caribbean Case," Development Policy Review, Overseas Development Institute, vol. 28(2), pages 237-255, March.
    16. Aspen Gorry & Devon Gorry & Sita Slavov, 2015. "Does Retirement Improve Health and Life Satisfaction?," NBER Working Papers 21326, National Bureau of Economic Research, Inc.
    17. Avato, Johanna & Koettl, Johannes & Sabates-Wheeler, Rachel, 2009. "Definitions, good practices, and global estimates on the status of social protection for international migrants," Social Protection and Labor Policy and Technical Notes 49172, The World Bank.
    18. repec:spr:jlabrs:v:52:y:2018:i:1:d:10.1186_s12651-018-0237-9 is not listed on IDEAS
    19. Lord, Janet & Posarac, Aleksandra & Nicoli, Marco & Peffley, Karen & Mcclain-Nhlapo, Charlotte & Keogh, Mary, 2010. "Disability and international cooperation and development : a review of policies and practices," Social Protection and Labor Policy and Technical Notes 56092, The World Bank.
    20. Emma Gorman & Grant M Scobie & Andy Towers, 2012. "Health and Retirement of Older New Zealanders," Treasury Working Paper Series 12/02, New Zealand Treasury.
    21. Ra, Young-Sun & Shim, Kyung Woo, 2009. "The Korean case study : past experience and new trends in training policies," Social Protection and Labor Policy and Technical Notes 53696, The World Bank.
    22. Kuddo, Arvo, 2009. "Structural educational reform : evidence from a teacher's displacement program in Armenia," Social Protection and Labor Policy and Technical Notes 47164, The World Bank.
    23. Barrett , Christopher B & Carter , Michael R & Ikegami , Munenobu, 2008. "Poverty traps and social protection," Social Protection and Labor Policy and Technical Notes 42752, The World Bank.
    24. Koettl, Johannes, 2009. "Human trafficking, modern day slavery, and economic exploitation," Social Protection and Labor Policy and Technical Notes 49802, The World Bank.

    More about this item

    Keywords

    Labor Markets; Health Monitoring&Evaluation; Labor Policies; Work&Working Conditions;

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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