Over-55s working longer could increase Ireland’s GDP by €15bn - report
Republic ranks in 20th place in PwC’s measurement of role of over-55s in labour force
If Ireland was to bring its employment rate for workers aged over 55 in line with Sweden, the resulting long-term GDP boost could be as much as 5.4 per cent, PwC said.
Ireland’s long-term GDP could be boosted by around €15 billion if the employment rate for workers over 55 increased substantially, according to a new report.
The report, from professional services firm PwC, shows that if Ireland was to bring its employment rate for workers aged over 55 in line with Sweden, the resulting long-term GDP boost could be 5.4 per cent.
At present, Ireland ranks in 20th place out of 34 in PwC’s measurement of the impact of over-55s on the labour market. Iceland, New Zealand, Israel and Sweden make up the top four countries in the list, while Greece, Slovenia, Luxembourg and Turkey round out the bottom.
Ireland’s mid-table performance comes due to the apparent lower employment rate of the over-55s compared with OECD average rates, PwC said.
“Flexible working policies can incentivise women to remain in work longer, so having the right policies in place will increase the employment rate of those over 55 and may help to reduce the gender pay gap which is shown to increase with age,” said Gerard McDonough, a director at PwC Ireland.
“The life experience of older workers and the skills they have acquired throughout their career make them hugely valuable to the modern workforce,” he added.
While Ireland could gain significantly in GDP terms, it pales in comparison to countries performing poorly in the table including Greece, which could see a boost of 16 per cent; Belgium, forecasted to see GDP increase by 13 per cent; and Slovenia, where GDP could rise by 12 per cent. The largest potential benefactor in monetary terms, meanwhile, is the US, which could gain around $0.5 trillion, or around 3 per cent of GDP.
PwC chief economist, John Hawksworth, said encouraging and enabling older workers to work for longer would boost consumer spending power and tax revenues in addition to GDP.
“Between 2015 and 2035, the number of people aged 55 and above in high-income (OECD) countries will grow by almost 50 per cent to around 538 million. It’s good news that we are living longer, but rapid population ageing is putting significant financial pressure on healthcare and pension systems. To offset these higher costs, we think older workers should be encouraged and enabled to remain working for longer.”