Ben Franklin's slides from the ILC-UK event on the 20th November 2014

1. Rising from the ashes: the role of older
workers in driving Eurozone recovery
Ben Franklin, Senior Research Fellow, International Longevity Centre
@ilcuk @bjafranklin
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.

2. What key issues does the report cover?
 The current economic state of the Eurozone
What we know (and don’t know) about the relationship
between population ageing and economic output?
 How could raising labour force participation at older ages
boost Eurozone GDP over the long term?
What factors are associated with working longer: evidence
from European and OECD countries
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.

3. The Eurozone: where are we now?
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.

4. Govt debt burdens continuing to rise…
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.

5. …as do private debt burdens
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.

6. Regaining competitiveness through painful internal
devaluation
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.

7. Where next for the Eurozone? The longer term
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.

8. The worst case: flagging productivity growth
and no increase in older workers
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.

9. What would happen if the proportion of older
people in employment rises?
 No conclusive evidence to suggest that older workers are
less productive than younger workers.
 Some academic studies suggest older workers drive up
productivity due to their experience and inventiveness.
 Problems with productivity amongst older workers may
indicate problems with management.
 Productivity of older workers may be sector and industry
specific.
 In our models we assume all workers are equally productive
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.

10. Isolating the impact of older workers on future
Eurozone economic output
Our three scenarios:
1.No change: Employment rates of the over 50s remains at
2013 levels up to 2050.
2.65+ catch up: There is a gradual increase in the
employment rates of the over 65s until catch-up with
Sweden’s high rate is achieved
3.50+ catch-up: There is a gradual increase in the
employment rates of the over 50s until catch-up with
Sweden is achieved.
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.

11. Results for the Eurozone, Core and Periphery
countries
Average annual growth rate in GDP per person (2014-2050)
*All scenarios assume workforce productivity growth of 1.5% per annum over the
projected period
*Core countries are: Germany, Austria, Belgium, Netherlands, France and Luxembourg
*Periphery countries are all other Eurozone members.
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.

12. What can we conclude from scenarios?
 Even a gradual increase in participation has
significant impact on output over long term.
 Raising participation rates will not be enough to
avoid stagnation.
 Must be accompanied by measures to rejuvenate
workforce productivity growth across the region.
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.

13. What factors are associated with working longer:
evidence from OECD countries
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.

14. But “carrots” and not just “sticks” are needed
to support working longer
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.

15. And let’s not forget the critical role of good health in
supporting longer working lives
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.

16. Quick recap….
 The immediate future of the Eurozone is dicey.
 But policymakers must also think about the medium to longer
term and the big challenge of ageing.
 Ageing could result in stagnating or shrinking economies if
workforce productivity fails to rise and older age groups are not
supported to work longer.
 Raising workforce participation could make a significant
material difference to rates of per capita growth but this is not
going to be a silver bullet.
 “Carrots” and not just “sticks” are needed to support longer
working lives and to harness the productive potential of older
workers.
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.

17. Many thanks
Ben Franklin
Senior Research Fellow
International Longevity Centre - UK
benfranklin@ilcuk.org.uk
02073400440
Twitter: @ilcuk @bjafranklin
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.