Introduction

Critical to the determination of the supply of labour to an economy is the number of people who are fit and able to work. In determining this ‘working population’, there is a host of factors to be considered, including most fundamentally the age structure and health of people in the economy. With the rise in joblessness of those of ‘working age’, and especially among those over 50, has come an interest in matters of ‘employability’ and the perceived reasons for higher rates of economic inactivity among older workers. This chapter addresses the demographic aspects behind these employability debates, focusing initially on Scotland and then demonstrating that many of its specific problems are replicated elsewhere. It is argued that lessons learnt in Scotland should be of wider application and concern, as similar challenges are being faced in most economies across the world.

Background

Generally, three key and related phenomena are leading to extensive and divergent population changes across economies and societies: extended longevity for both men and women; declining fertility and birth rates; and nationally and regionally specific issues, such as differential trends among minority ethnic communities and migration between and within areas.

Yet, while these demographic trends are increasingly being recognised – for instance, demographic ageing has been debated in Canada since 1980 – it is only recently that their impact has begun to be addressed significantly. A key area of increasing interest in most member countries of the Organisation for Economic Cooperation and Development (OECD) has been the growing number of older men and women of working age outside the labour force (Hollywood et al, 2003). For example, in England, the Performance and Innovation Unit (2000) estimated that there were 2.8 million workless people in the 50- to 65-year age group alone in 2000, a figure projected to increase by a further million by 2010. Indeed, many are leaving the labour force at progressively younger ages, even though the population is ageing and living longer (Anyadike-Danes, 2002). Progress on addressing such ageing issues in Europe was recently criticised by the International Monetary Fund (IMF), which argued: ‘As long as Europe fails to adequately reinvigorate its inflexible labor markets and better prepare to deal with the consequences of its rapidly aging population, its growth rate will likely continue to lag’ (Rogoff, 2002).