Human Capital and the Older Worker The need for solid indicators Peter Ester OSA - Institute for Labour Studies Tilburg University, Netherlands Presentation at the Second OECD World Forum “Statistics, Knowledge and Policy” Istanbul, Turkey, June, 2007

Three challenges for OECD economies ageing & declining workforce acceleration of globalization swift move towards knowledge economy

Solutions to challenges? immigration scenario: little enthusiasm most popular scenario: keeping older employees longer in the workforce anti-early retirement policies but: longer working is NOT enough: we need MORE productive & flexible older workers maintain and secure older workers´human capital

Shifting age productivity The Netherlands:

Shifting age productivity The Netherlands: productivity peak has shifted to higher cohort ages by about 10 years implication: generations differ in productivity more recent generations are more productive need for comparative OECD indicators of human capital by age and generation

Training & work Heckman (2000) -“Skills beget skills”  early investments promote later investments in human capital Schils & Fouarge (2007) -training reduces early retirement -  7%-points increase of labour force participation of year old Self-reinforcing effect: training  employment  training  …

Work experience & informal learning Arrow (1962) - learning by doing important determinant of productivity growth Borghans, Golsteyn & De Grip (2006) -informal learning: 96% of total learning on- the-job -1 year of work=1/2 year of formal education -at age 60: still 25% of working time -propose indicators for informal learning and skill acquisition

Conclusions OECD economies depend on older workers but: competitive in terms of human capital, employability & productivity major concern for OECD countries need for solid OECD trend indicators on human capital of older workers comparative indicators of human capital by age groups and by generation comparative indicators on informal learning and skills acquisition OECD economies need to invest in older workers human capital of older workers: OECD’s next frontier

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