An Ageing Population


    An Ageing Population

    • Older workers have experience and tend to stay with existing employers and lose fewer days through illness.
    • On the other hand, they tend to be less geographically and occupationally mobile and their skills may need to be updated
    • DIY stores and supermarkets tend to employ over 50s, as they realise that these workers have a lot to offer and thus it increases the pool of workers they can draw upon
    • With the population aging, that means a higher proportion of citizens are likely to be economically inactive and claiming a pension, thus decreasing the revenue the state gets via taxation, and yet increasing the overall costs of state benefits
      • This is known as the dependency ratio (proportion of the population that are reliant on the output of other workers), and puts pressure on government spending
      • This is also known as the ‘demographic time bomb’


    • The government is considering a number of ways to try an maintain pensioners’ living standards, while reducing the fiscal pressure of an ageing population. Some methods include:
      • Raising the retirement age
        • This reduces the number of pensioners and increases the number of workers, thus reducing the dependency ratio
      • Discouraging early retirement
      • Increasing the labour force by other means
        • This could include increasing the economic activity rate of lone parents and the disabled, and permitting more immigration
      • Promoting occupational and personal pension scheme
        • Relying on private funding of pension scheme reduces the fiscal burden on the government
      • Encouraging a change in salary structures


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