Ageing population 'poses economic dangers'

Ireland’s ageing population poses significant long-term dangers for the country’s economy, a major labour conference heard today.

By 2036, more than 40% of the workforce will be aged 50 or over, according to economists.

Delegates at the Active Ageing and Labour Market Trajectories seminar in Dublin urged the Government to make it easier for older people to continue in employment beyond retirement age.

The conference heard from a number of international experts on pensions issues and the need to root-out ageist discrimination in the workforce if Ireland’s economy was to continue to flourish.

“Failure to retain fit and healthy older workers in the labour force means that, on an individual level, people can fail to realise their full potential and may suffer financial hardship,” Research Director of the Irish Longitudinal Study on Ageing (TILDA) Professor Brendan Whelan said.

He continued: “On a national level, it also poses serious dangers for the Irish economy as our population continues to age over the coming decades.

“Too many obstacles are put in the way of people remaining in the workforce at older ages.

“Policymakers in Ireland need to understand that an enormous pool of talent and experience that can benefit Ireland’s economy, and society may be lost by the failure to introduce appropriate policies with regard to pensions, healthcare and social welfare specifically geared to the needs of older workers.

“We can learn a lot about how to design such policies from other countries and our conference brings together leading international experts for this purpose.”

Prof Whelan cited forecasts from the Economic and Social Research Institute (ESRI) which state the current ratio of about four working people for every one person over 65 years will fall to 2.5 within 20 years and to 1.5 by mid-century.

“That represents a two-pronged threat in the form of the cost of meeting increased social welfare costs from a smaller working population and also the shortage of labour that will result," he said.

“We cannot assume that immigrant workers will automatically make up the labour shortfall.

“Society has to end its prejudice against older people continuing to work beyond retirement age – if they wish to do so."

Addressing the conference on the implications of ageing for the pensions industry, Chief Executive of Irish Life Corporate Business Donal Casey said Ireland was in a better position than most other countries to cope with the problem.

He said: “Ireland has a comparatively young population and we are in an immeasurably better position than countries such as Germany and Japan which are already suffering the consequences of an ageing population.

“We have time to prepare for the pension funding challenge – initiatives such as the National Pensions Reserve Fund have been taken by the Irish government, while the pensions industry itself is also taking initiatives that should ensure this country does not suffer from any 'pensions time bomb' down the line.”

But he added Ireland could not be complacent about the future, saying policies needed to be enacted to make it easier and more attractive for older people to continue in employment beyond retirement age.

Other speakers at the conference emphasised the value of phased or gradual retirement to both the individual and society.

The particular importance of attracting and retaining women in the workforce was also discussed.

TILDA is a major initiative to support successful ageing in Ireland.

Launched by Mary Harney in November 2006, it charts the health, social and economic circumstances of Irish people aged 50 and over.