Rafal Chomik and Fatima Jamal Khan
Older Australians are a critical part of the workforce and economy. The share of workers aged 55+ has more than doubled from 9% in 1991, to 19% in 2021, led by women re-entering work in mid-life and delaying retirement.
The ageing of the workforce is expected to continue, but at a slower rate. In fact, without further interventions, workforce ageing will be slower than that of the overall population.
This is partly because the large cohort of Baby Boomers will retire and partly because increases in the labour force participation of older workers is decelerating. More ambitious mature-age participation rate targets are possible, could largely offset declines in labour supply, and could be expected to yield economic gains.
Older Australians are ready. Defined here as those age 55-64 or 55+, older Australians today are healthier and more educated than ever and willing to work. This vast resource of potential workers needs to be well deployed. Compared to leading countries, the Australian labour market scores poorly on mature worker outcomes.
Employers need better strategies to seize the opportunities that an older workforce presents and turn it to their competitive advantage. Failing to adapt would be costly to individuals, firms, and society. Governments can help with a more strategic approach, continuing to support health, mainstream lifelong learning, and address shortcomings related to regulation, incentives, and labour market programs.
Past reports have examined the topic (e.g., the Australian Human Rights Commission (AHRC), Productivity Commission, and Treasury). So, the purpose of this research brief is to take stock of the latest trends and present the newest research insights, particularly from CEPAR researchers, of whom over 30 are featured throughout the brief.
The research brief also builds on a series of other CEPAR briefs and industry reports (e.g., Mature-age Labour Force Participation: Trends, Barriers, Incentives, and Future Potential in 2012; Retirement Income in Australia in 2018; Maximising Potential: Findings from the Mature Workers in Organisations Survey in 2019).
The brief is in four parts. Part I sets the macro demographic context, presenting past trends and projections for the future. These combine population, participation, and productivity, in what is known as the 3P framework, to show that more mature workers could increase economic prosperity.
Part II outlines trends relating to health, caring, education, and social attitudes, which are some of the commonly cited examples of barriers to work.
Part III assesses outcomes for older workers in Australia compared to other countries, to prime-age workers, and over time. These imply that the age-friendliness of Australia’s labour market is lagging, and that, while there are positive signs of progress, some mature workers, particularly women, continue to experience poor outcomes.
Finally, Part IV presents research on what employers can do to respond. This includes the helpful 3i framework, developed by CEPAR researchers (Andrei and Parker, forthcoming), which proposes a series of strategies to help employers better Include workers over the life cycle, Individualise their responses to different circumstances, and set up processes that better Integrate workers of all ages in an organisation (Boxes 17-20). The brief concludes with a call for government to implement a coherent, multipronged strategy to support an ageing workforce.