More People Chasing Fewer Jobs?

Although the Lancet study didn't look at the developing world -- in
part because of the difficulty in getting consistent information on
health and ageing issues -- these countries are also experiencing
increases in life expectancy. In addition, China and India both have
relatively young populations, suggesting that they will be available to
buy the retirement assets of older investors in developed countries
over the coming decades.

Meanwhile, if people are living longer and in better health, and if
they are choosing to work later in life, will there be enough jobs to
keep them employed? "Nobody knows," says Mitchell. "What we can do is
look at the handful of countries that have aged more quickly than the
U.S., like Japan and Singapore. We know there is substantial pressure
on employers to set up more flexible work arrangements so that people
can job share. In Japan, they have mandatory retirement -- often at age
60 or 65 -- but an employee might work up until a Friday, retire, then
show up again on Monday at the same company in a new job earning half
the pay. So the whole compensation and job responsibility issues are
renegotiated, and the employee's role in the company is quite
different. He may be a mentor or a consultant, which provides both the
wisdom and continuity of knowledge that older workers typically have to
offer. But it also allows the next generation to come in and learn the
ropes."

According to Wharton finance professor Andy Abel, three basic data
points determine the number of working age people: first, births 20
years ago, which indicate how many 20-year-olds there are in the
workforce; second, immigration, both legal and illegal, among all age
groups; and third, mortality rates."

Given that the Lancet study suggests a significant reduction in old-age
mortality, will more people be working longer and chasing after fewer
jobs? "Not necessarily," says Abel. "Where macroeconomics comes in is
that there are more people around and they are demanding more health
care, more recreational facilities, and other types of goods and
services. So one shouldn't think of there being a fixed number of jobs.
Overall demand for goods will go up, and that will help create an
increasing demand for jobs. The impact on compensation will depend on
what goes up more: the supply of labor or the demand for labor."

Smetters sees two effects in terms of job growth. "As people live
longer and if they can maintain their productivity, they will simply
increase their working years. If someday we are living to be 150, we
obviously won't be retiring at 65. Second, it is true that if you have
a lot of people competing for the same jobs, the jobs will be created
simply because there is a potentially cheap and experienced workforce."
If there is indeed this bulge of people, it could also mean that the
wages being paid will be lower. "But not everyone will be doing it for
the money," he notes, adding that elderly people also rejoin the
workforce in order to socialize and keep active.  

Meanwhile, in Europe, unlike in the U.S., there will be a decline in
the labor force, "which means there will be jobs available," says
Doblhammer-Reiter. "Resources will have to be found. Elderly people are
one possible resource; another one is women. In many European
countries, women don't work when they have families. A third resource
is immigrants. But given the political discussion in European
countries, I think it is less controversial" for elderly workers and
women to enter the work force rather than to open the door to higher
immigration. Vaupel also notes the differences between the U.S and
other regions. The birthrate in the U.S. has been much higher in the
preceding decades than it has in Japan and Europe, he says, and the
country has experienced a much greater influx of immigrants, along with
"not very much outmigration." In addition, people who move to the U.S.
tend to be of working age, which increases the labor pool, and they are
often highly educated.