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Commentary: Post-pandemic economies have a labour problem – older workers are resigning


It’s price stating that earlier than the pandemic, the variety of retirees was falling as employees had been retiring later in life. This was pushed by will increase within the state pension age, which rose from 65 to 66 from 2019 to 2020. 

The rise in retirements that we’ve got seen throughout and after the pandemic is partly the emergence of an underlying development that was hidden whereas the state pension age rose.

OFFER MORE HELP TO RETAIN WORKERS

This unprecedented rise in inactivity among the many over-50s poses vital challenges for the financial system.

It comes at a time when the federal government is having to take care of growing resignations amongst different age teams, labour shortages, the rising value of dwelling and the evolving results of Brexit. 

Given their comparatively low earnings, these retirees might additionally doubtlessly face monetary difficulties later in retirement and add strain to authorities spending. What then might be executed to halt and even reverse the silver exodus?

The rise in inactivity will not be within the lowest-income elements of society, the place the federal government concentrates its efforts to incentivise work by way of the advantages system.

The federal government would possibly subsequently think about extending these incentives, comparable to Working Tax Credit, to succeed in lower-middle-class folks to try to encourage them to return to work.

Maybe the price of dwelling disaster will drive the over-50s again into work, partially fixing the UK’s labour shortages. However fixing one downside with one other will not be prone to make anybody – employees, companies or the federal government – any happier. Tough days, subsequently, lie forward.

Carlos Carrillo-Tudela, Alex Clymo and David Zentler-Munro are Professors of Economics on the College of Essex. This commentary first appeared in The Dialog. 



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