United Kingdom: Research Suggests Higher Proportion of Older Workers Can Lower Overall Productivity

A research paper finds that, in the United Kingdom, the higher the proportion of over 50s in the workforce in a local authority area, the lower the overall level of productivity. In "Does ageing matter when it comes to workforce productivity?," the International Longevity Centre–UK suggests that this "may be because work suffers from diminishing returns: that for every additional year worked, there is a relatively smaller gain in output."

The paper also argues that whilst rising life expectancy and other factors might raise the age at which productivity peaks, the broad shape of a worker’s lifetime productivity curve is likely to remain, so that a higher share of older workers will likely drag down overall levels of productivity.

According to Ben Franklin, the Centre's Assistant Director of Research and Policy:

With reference to English Local Authority data, this report provides support to both prevailing conclusions in the economic literature regarding the impacts of ageing on productivity. An older workforce may be a drag on output, but an ageing population could raise the rate of productivity growth.

In any case, investment in education and health are likely to remain critical drivers of long run productivity. Both are strongly correlated with the productivity performance of local authorities in our analysis, and focusing on the health and education of the workforce, irrespective of age, is therefore likely to support higher levels of economic output.

Source: International Longevity Centre–UK Press Release (May 11, 2018)