Human Capital & Ageing
as part of the "Next World Program"
April 13-14, 2015 Harvard School of Public Health Boston, Massachusetts
David E. Bloom, Harvard School of Public Health, USA; David Canning, Harvard School of Public Health, USA; Karen Eggleston, Stanford University, USA; Wang Feng, Fudan University, China; Hans Groth, World Demographic & Ageing Forum, Switzerland; Alfonso Sousa-Poza, University of Hohenheim, Germany; Thomas Zeltner, Special Envoy, World Health Organization, Switzerland.
One of the challenges faced by ageing societies is maintaining a workforce large enough to supply the goods and services needed by a country's entire population. In the coming decades, industrialized countries will experience a steep increase in the share of elderly persons in the population and a fall in the share of the working-age population. In some countries, the number of people aged 60-64 (many of whom are about to retire) already exceeds the number of people aged 15-19 (the cohort soon entering the labour market). There will, however, be mitigating factors that will tend to decrease the effects of declines in the working-age share of the population: (a) the burden of caring for a high number of elderly people will be offset by there being fewer children to support, and (b) the proportion of adult women who work will rise when there are fewer children to take care of. Still, if there is no change in work and retirement patterns, the ratio of older inactive persons per worker will almost double from around 38 percent in the OECD area in 2000 to just over 70 percent in 2050 (OECD, "Live Longer, Work Longer", 2006). In Europe, this ratio could rise to almost one older inactive person for every worker over the same period.
Ageing on the anticipated scale will place substantial pressure on public finances and economic growth. According to the OECD, on the basis of unchanged participation patterns and productivity growth, the growth of GDP per capita in the OECD area would decline to around 1.7 percent per year over the next three decades, as compared with about 2.4 percent per year between 1970 and 2000. These negative consequences of ageing could be possibly offset by postponement of retirement, greater immigration, faster productivity growth, or higher fertility (although the positive economic effects of higher fertility would only come several decades after an uptick in fertility rates). While these developments would all help offset the negative effects, they need to go hand-in-hand with attempts to mobilize available labour in order to sustain economic growth. One of the most significant sources of additional labour supply is older people who are currently inactive. Indeed, as labour markets tighten, companies will soon have little choice but to be more welcoming of older employees. Prompt action to harness – and enhance – the contributions of older workers could become a key competitive advantage.
The objective of this workshop would be to discuss one important topic related to an ageing workforce, namely human capital. How does a worker’s human capital change over the life course and what role does the health and skill status of workers play? The answer to these questions is of great importance, not only for adequate human resource policies, but also for macroeconomic policies, especially those associated with retirement and economic growth. Despite the importance of this issue, this question is not easily answered.
The workshop will bring together researchers to present recent research on ageing and human capital.