Thursday, May 24, 2018

Latin America: Older Worker Participation Rates Driven by Lack of Access to Contributory Retirement Systems

A joint publication issued by the Economic Commission for Latin America and the Caribbean and the International Labor Organization indicates that the lack of retirement income forces many men and women over 60 in the region to remain active in the labor market. In edition No. 18 of the "Employment Situation in Latin America and the Caribbean (May 2018)," it was found that the lack of income from a contributory pension system in more than half of all men, and above all in women, aged 60 or over in Latin America, is the main factor for remaining active in the labor market.

According to projections made by the organizations, the proportion of people aged 60 or older in the workforce will rise from 7.5% to 15% between 2015 and 2050. This is due, above all, to the aging of the population and, to a lesser degree, a moderate increase in older adults’ labor participation.
Despite recent advances in employment formalization and the expansion of contributory pension systems, according to data from eight countries in the region an average 57.7% of people between 65 and 69 years of age, and 51.8% of people 70 or older, still do not receive a pension from a contributory system, with even higher rates seen for women. This situation forces many older people to work: the employment rate for all people 60 years or older totals 35.4% in the region, the study indicates. This proportion is elevated even in age groups that have already exceeded the legal retirement age: 39.3% in the group from 65 to 69 and 20.4% in the segment of 70 years or older. The rates are higher in countries with low coverage of contributory pension systems, the report explains.
Accordingly, Alicia Bárcena, ECLAC’s Executive Secretary, and José Manuel Salazar, ILO Regional Director, indicate in the publication’s foreword that "It is necessary to expand pension system coverage and supplement it with non-contributory pensions to reduce the pressure on older people to continue working, usually in low-productivity jobs, just to have a minimum standard of living at an age when societies should guarantee them the conditions to enjoy their old age with dignity."

Source: Economic Commission for Latin America and the Caribbean Press Release (May 22, 2018)

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