Guest Q&A|Monika: Population Aging Challenges Social Protection

摘要：The global population of people aged 65 or over is expected to double by 2050. Aging is already a global trend, posing severe chal

The global population of people aged 65 or over is expected to double by 2050. Aging is already a global trend, posing severe challenges to social security systems. Whatspecific measures should countries take to adjust their pension supply structure, improvefunds' operational efficiency, and promote social security reform? What industrial opportunities can be sought at the same time?

Monika QUEISSER

Senior Counsellor tothe Director of the OECD's Employment, Labourand Social Affairs Directorate and Head ofSocial Policy Division

Population ageing is a major challenge for social protection systems. It raises expenditures on pension benefits and long-term care services while reducing revenues, as there are fewer people of working age making social contributions and paying taxes.

The average OECD old-age to working-age ratio stood at 33 people aged 65 and over per 100 people of working age (20 to 64 years old) in 2024. It is projected to almost double to 59 by 2064. The average total fertility rate (TFR), across the OECD, dropped from 3.3 children per woman in 1960 to 1.5 in 2022, far below the replacement level of 2.1 needed to keep population levels stable (abstracting from migration). Parents are having fewer children today, and childlessness is becoming more common. In parallel, the age at which mothers have their first child increased from 26.5 years in 2000, on average across the OECD, to 29.5 in 2022. Life expectancy, by contrast, has increased substantially. In 2022, men aged 65 could, on average across the OECD, expect to live until age 83, and women to 86. By 2065, life expectancy at age 65 is projected to increase further by 4.4 years for women and 4.9 years for men.

Older people are at higher risk of poverty than other age groups in two thirds of OECD countries, although poverty risks for younger people are higher than for older people in some countries. In the OECD between 2014 and 2020, the "at-risk-of-poverty rate" for people aged over 65 increased from 12.5% to 14.2%. Older women are more likely to be poor (17%) than men (11%). Women have lower earnings-related pension income of their own, and because they live longer, are more likely to be widowed and live alone, possibly reliant solely on a survivor pension.

Care needs are also increasing as the population ages. OECD estimates suggest that employment in long-term care (as a percentage of total employment) would need to rise by 32% over the next ten years to meet the expected increase in demand for caregiving. Without large investments in formal long-term care, unpaid care will be provided by family, friends and neighbours, and predominantly by women, with negative impacts on their ability to participate in the labour market. Declining family sizes and increasing geographical mobility mean that there will likely be fewer people to provide this care.

Being able to combine work and family life has historically led to better economic outcomes and higher fertility rates. But even in countries like Denmark, Norway, Hungary and Sweden – which offer a continuum of support to parents – the TFR rests around 1.5 children per woman. This suggests that other factors are also at play. Increasingly, the costs of housing and private education are barriers to having (more) children. Other factors might be the effects of the recent rapid succession of global crises, resulting in feelings of uncertainty and unpredictability, as well as increased volatility in labour markets, all of which may dissuade people from becoming parents.

The main tool countries have used to address the pressure population ageing puts on pension budgets is increasing statutory retirement ages. People entering the labour market today, who expect to retire in the 2060s, will face a statutory retirement age of 66 across the OECD, on average, if current legislation is implemented, compared to around 64 for those retiring today.

Promoting the employment of older workers is key, as most OECD countries are already facing labour shortages across many sectors and occupations. Progress in this area has been impressive. The employment rate of 55 to 64 year olds in the OECD reached a record 64% in mid 2023, almost 8 percentage points higher than a decade ago.

Yet many older workers still struggle to keep their skills up to date, report leaving work due to ill health, have limited access to good-quality jobs, and risk having an inadequate pension in old age because of short and unstable working careers. Participation in formal and informal training among older workers is less than half of that of prime aged workers, on average. Perceptions of age discrimination in hiring also remain common despite the fact that it is legally banned in virtually all OECD countries.

Better preventative health, improved working conditions, and retraining and reskilling will increase healthy years in life further and help older workers strengthen their labour market attachment. But it must be acknowledged that there are large differences between groups of workers and across countries in the expected number of years in retirement, especially in good health. Policy makers must also address such persistent socio-economic inequalities, which may fuel resistance against pension reforms.