The Netherlands is utilising the potential of employees aged 55 years or older insufficiently. Our Gross Domestic Product (GDP) therefore misses out on 90 billion euros of additional growth.
If all OECD-countries would increase the labour participation levels of 55 to 69 year olds to that of New Zealand, the potential long term gain to economic growth could be 3.5 trillion US dollars. This is the outcome of PwC’s annual Golden Age Index.
Between 2015 and 2050, the number of people aged 55 and above in OECD countries will grow by almost fifthy per cent to around 538 million. An ageing population is already putting significant financial pressure on health, social care and pension systems, and this will only increase over time.
"To offset these higher costs, older workers should be encouraged and supported to remain in the workforce for longer', says Jan Willem Velthuijsen, PwC's chief economist. "This would increase GDP, consumer spending power and tax revenues. It could also help to improve the health and wellbeing of older people by keeping them mentally and physically active."
The Netherlands’ absolute performance on the index has improved over time. This largely reflects a significant improvement in the employment rate of 55-64 and 65-69 year olds. Despite steady improvements in absolute terms, the Netherlands’ relative performance on the Golden Age Index remains slightly below the OECD average. Other countries, such as Germany, have improved at a faster rate.
In the Netherlands, there are considerable disparities in the employment rates of older workers across the country, ranging from 68.5 per cent in the province of Utrecht, to 57.6 per cent in the province of Groningen. Regional variations in employment of older workers across the Netherlands are related to variations in economic performance of these regions, to average educational attainment and to gender disparities.
Financial incentives and caring responsibilities are key drivers in the decision for older workers to continue participation in the workforce.
Our analysis suggests that financial incentives and caring responsibilities are key drivers in the decision for older workers to continue participation in the workforce. The Dutch government has invested in removing obstacles to employment for older workers. However, we still need to focus on these key areas to support longer working lives for an ageing population:
The Golden Age Index is a weighted average of various indicators. Labour participation, earnings and training attended are among others, indicators that show the impact of employees older than 55 years on the labour markets of OECD-countries.
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