Closing ‘participation gap’ among over-55s could create 55,000 Scottish jobs

Bringing Labour Market Participation Among Scotland’s Older Workers Up to Par with the South East of England

The latest Golden Age Index from PwC UK reveals that increasing labour market participation among Scotland’s older workers to match the levels in the south east of England could result in the creation of over 55,000 additional jobs.

The index examines the employment rate of workers aged 55 to 64 in the UK and highlights significant regional disparities. Scotland ranks as the third lowest among the UK’s nations and regions, with an employment rate of 60.7%, compared to 68% in the south east.

Regional Disparities and the Sustainable Development Goals

The Golden Age Index measures how well countries are utilizing their older workers. It indicates that if all 12 UK regions absorbed older workers into the labour force at a similar rate as the south east, it would result in an additional 320,000 jobs, equivalent to approximately one third of UK vacancies.

The regional disparities in employment rates are influenced by various factors, including educational incomes and the likelihood of older workers in Scotland, the north east of England, and Northern Ireland to be employed in industries like education, health, and manufacturing, which offer less flexibility for employees.

Opportunities for Scotland

Jason Morris, regional market leader at PwC Scotland, emphasizes the opportunity for Scotland to increase the participation of older workers in the labour force. This would not only benefit the economy and alleviate inflationary pressures but also allow businesses and younger workers to benefit from the valuable skills and experience of older individuals.

Furthermore, the findings of the Golden Age Index align with the key points highlighted in our recent Good Growth for Cities Index, which revealed that Glasgow, Edinburgh, and Aberdeen are performing below the UK average for health. The impact of health inequalities may be contributing to older workers choosing to exit the Scottish labour market.

Morris suggests that with more options for flexible working across key industries and the wealth of transferable skills possessed by older Scottish workers, there is potential to harness the power of individuals over the age of 55 to boost the Scottish labour force and productivity. Employers and businesses are urged to target these individuals and support them in utilizing their skills or upskilling them to take advantage of flexible working options.

Labour Force Trends Among Older Workers in the UK

The latest edition of the Golden Age Index reveals that people in the UK aged over 55 are more likely to have left work and not returned compared to those in other G7 countries.

Based on data from 2021, the UK’s ranking among 38 OECD countries remains unchanged since 2016, placing it at 21. The UK stands out among the G7 as economic activity levels among older workers have not fully recovered to pre-pandemic levels. Over 55s account for three quarters of the rise in total economic inactivity since the pandemic.

The primary reasons for the UK’s declining employment rate for older workers are high house values, investment income, and poor health. In contrast, New Zealand, Iceland, and Japan rank highest for the proportion of economically active over 55s in the labour force.

Barret Kupelian, chief economist at PwC, highlights the importance of understanding the causes of these labour force trends. Convincing older workers to return to work could help businesses address labour shortages with experienced staff, ultimately alleviating domestic inflationary pressures. Businesses and policymakers should focus on designing policies to support those who want to continue working and incentivize older workers to return if they wish.

The research also suggests that house prices and investment income may have contributed to the lower employment rate of older workers during the pandemic. A 10% increase in house prices historically corresponds to a 0.1 percentage point decrease in employment rates for 55 to 64 year-olds, all else being equal. The rapid appreciation of house prices during the pandemic may have reduced the post-pandemic employment rate of older workers in the UK.

Conclusion

The Golden Age Index highlights the potential for Scotland to increase labour market participation among older workers and create thousands of additional jobs. Addressing regional disparities and supporting older workers in their transition back into the labour force aligns with the Sustainable Development Goals (SDGs), particularly SDG 8: Decent Work and Economic Growth. By harnessing the skills and experience of older individuals, Scotland can boost its economy, alleviate inflationary pressures, and promote inclusive growth.

SDGs, Targets, and Indicators Analysis

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 8: Decent Work and Economic Growth
• SDG 10: Reduced Inequalities

The article discusses the employment rate of older workers in Scotland and the regional disparities in labor market participation. It highlights the potential for creating additional jobs by increasing labor market participation among older workers. This aligns with SDG 8, which aims to promote sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all. The article also mentions the disparities in employment rates between different regions, indicating a connection to SDG 10, which focuses on reducing inequalities within and among countries.

2. What specific targets under those SDGs can be identified based on the article’s content?

• Target 8.5: By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities.
• Target 10.4: Adopt policies, especially fiscal, wage, and social protection policies, and progressively achieve greater equality.

The article emphasizes the need to increase labor market participation among older workers in Scotland to create additional jobs and benefit the economy. This aligns with Target 8.5 of SDG 8, which aims to achieve full and productive employment and decent work for all. Additionally, the regional disparities in employment rates mentioned in the article highlight the need to address inequalities, connecting to Target 10.4 of SDG 10, which focuses on adopting policies to achieve greater equality.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Employment rate of workers aged 55 to 64
• Regional variations in employment rates
• Economic inactivity rate of older workers
• House prices and their impact on employment rates

The article mentions several indicators that can be used to measure progress towards the identified targets. The employment rate of workers aged 55 to 64 is a key indicator to track progress towards Target 8.5 of SDG 8. The regional variations in employment rates highlight the need to address inequalities and can be used as an indicator for Target 10.4 of SDG 10. The economic inactivity rate of older workers is another important indicator to monitor progress towards increasing labor market participation among older workers. Additionally, the impact of house prices on employment rates provides insights into the potential factors influencing labor market participation.

Table: SDGs, Targets, and Indicators

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Source: insider.co.uk

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