24/01/2018 - Providing American seniors with better work incentives and opportunities will be crucial for the United States to meet the challenges of its rapidly ageing population. By 2028, more than one in five Americans will be aged 65 and over, up from fewer than one in six today, according to a new OECD report.
Working Better with Age and Fighting Unequal Ageing in the United States finds that employment rates among older workers in the United States are above the average across OECD countries. In 2016, 62% of all 55-64 year olds were employed compared with the OECD average of 59%. However, employment rates are much lower among some older population groups. Early retirement is prevalent among workers from vulnerable socio-economic backgrounds, often occurring as soon as Social Security benefits become available at age 62. Poverty among seniors is a challenge: more than 20% of peopled aged 65 and over have incomes below the relative poverty line – defined as half of the median disposable household income – compared with the OECD average of less than 13%.
“More needs to be done to promote greater inclusiveness at old age and foster better, longer working lives for all Americans. A comprehensive policy approach is needed to help individuals overcome disadvantages over their life course,” said OECD Secretary-General Angel Gurría, launching the report at the World Economic Forum in Davos. “This could both help reduce old-age poverty and strengthen public finances by reducing public outlays on Social Security.”
The report stresses the importance of fostering more flexible transitions to retirement, for example through a combination of part-time work and pension incomes. This can help older workers to remain employed longer. Currently, however, only around 40% of older workers in the United States aged 65 and over are working part-time compared with over 65% in OECD countries such as Germany and the United Kingdom.
Among its other recommendations, the OECD suggests the following approaches:
For further information, journalists are invited to contact Johanna Gleeson in the OECD Washington Center (Johanna.Gleeson@oecd.org / +1 202 822 3866).
Working with over 100 countries, the OECD is a global policy forum that promotes policies to improve the economic and social well-being of people around the world.