Raising employment rate of over 55s could add £105bn to GDP
20 June 2016
According to new PwC analysis the UK could add around 5.8% to its GDP (around £105 billion) if the employment rate of workers over 55 could match the highest performing EU country of Sweden.
The analysis from PwC compares employment of older workers across 34 OECD (Organisation for Economic Co-operation and Development) countries. This would translate to a 15 percentage point increase in the UK’s full-time equivalent employment rate for workers aged 55-64 and a 4 percentage point increase for people aged over 65.
PwC’s Golden Age Index is a weighted average of indicators – including employment, earnings and training – that reflect the labour market impact of workers aged over 55. The UK has remained middling in the rankings since 2003, rising by one place to 18th in 2014 from 19th in 2013.
While the UK has increased its employment rate among 55-64 year olds broadly in line with Sweden since 2003, the gap between the two economies remains similar. For people aged over 65 the employment rates of the UK and Sweden are closer together, but there is still room for improvement.
The UK has a high incidence of part-time work for 55-64 year olds. While this may be preferable for some workers, it could also adversely affect earnings, pensions and job security and so enters into the index negatively. But the UK has made some progress since 2003 in closing the gender gap between male and female employment rates for 55-64 year olds.