The Labor Market Decisions of Older Workers in Ageing Economies: Evidence from Spain and the UK

Rodrigo Barrela, Pragyan Deb, Gloria Li and Carlo Pizzinelli

No 2025/030, IMF Working Papers from International Monetary Fund

Abstract: Faced with fiscal pressures and labor shortages from ageing populations, Advanced Economies need to ease obstacles to longer working lives. In this paper, we discuss recent developments in employment and activity of workers aged 55 and above in Spain and the UK—two countries that differ widely on historical and recent employment rate patterns as well as institutional settings. We then explore themes related to their labor market decisions, including flows into and out of the labor force, health, working arrangements, and unemployment benefits systems. The differences and commonalities between the two countries highlight the diversity of obstacles to longer working lives and the need for policies to act upon all of them. Policy priorities include addressing worsening health, improving accessibility for older workers with physical limitations, providing incentives to return to employment for the long-term unemployed, and greater flexibility in hours and working arrangments for those who have family caring duties or want to gradually transition out of work.

Keywords: Ageing; Older Workers; Retirement; Labor Force Participation; policy priority; labor market decision; IMF working paper 2025/30; older worker; job search; early retirement; Aging; Labor markets (search for similar items in EconPapers)
Pages: 59
Date: 2025-01-31
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