The aging population across Organization for Economic Co-operation and Development (OECD) economies is emerging as one of the biggest workforce challenges over the next two decades, with age-related discrimination threatening to result in nearly $500 billion in lost productivity by 2040, according to a report by the World Economic Forum (WEF) and Marsh.The OECD 38 is a group of mostly high-income countries that work together on economic policy, trade and development.The report warns that the labor market is entering a period where the number of older adults is growing far faster than the number of working-age people, making it costly for economies to sideline experienced workers. “It is estimated that OECD countries will face a productivity loss of about $500 billion by 2040 due to underemployment and underemployment of adults aged 55+ compared to younger workers,” ANI was quoted as saying.Globally, the population aged 65 and over is expected to increase from 856 million to 1.3 billion by 2040, an increase of more than 50 percent. Over the same period, the population between 25 and 64 years of age, considered the main working-age group, is projected to grow by only 13 percent.Against this backdrop, the report estimates that OECD countries could collectively lose about $500 billion in productivity by 2040 as workers aged 55 and older are more likely to remain unemployed for longer periods of time or leave the labor market than their younger counterparts.The economic burden is expected to be particularly pronounced in major economies. Between 2025 and 2040, long-term unemployment among older workers could reduce GDP by $113 billion in the United States and $106 billion in France. Damage were estimated at $105.8 billion in Brazil, $26.3 billion in the Netherlands, $25.6 billion in the United Kingdom, $7.5 billion in Canada, and $5.9 billion in Japan.The real impact is likely to be even greater because many older people stop looking for work after facing repeated barriers to employment, meaning they disappear from official unemployment statistics, the WEF said.In addition to economic losses, the report notes that ageism also results in significant health and social costs. In the United States alone, age-based discrimination has been linked to approximately 17 million cases of disease and added at least $63 billion to health care spending in 2018. Research has also linked workplace ageism to depression, poor physical health, and less access to medical care.The report further argues that businesses would benefit greatly from retaining older workers rather than viewing aging as a workforce risk. Organizations with multi-generational teams benefit from strong innovation and knowledge sharing, with experienced employees mentoring younger workers as well as acquiring new digital skills.Many countries have already adopted policies to extend working life. South Korea has achieved a record 70 percent employment rate among people aged 55-64, Japan has seen employment rise among people over 65 in two decades, while Sweden allows people to withdraw part of their pensions without leaving the workforce.According to the report, tackling age discrimination is no longer just a social objective but an economic necessity. Making workplaces more age-inclusive could help reduce labor shortages, improve productivity and ease pressure on public finances as the population continues to age.
