How can Israel create an economy fit for an aging population?
The “twin threats” of societal aging and workplace automation pose major challenges to both Israel and economies the world over.
An aging population caused by trends of rising life expectancy – predicted to increase to 84.4 years among Israelis by 2040 – and declining birth rates are leading to what has been described as a pensions time bomb, requiring the dedication of unprecedented resources to supporting the retired and elderly.
In addition, tasks associated with older workers are also the most vulnerable to being replaced by intelligent workplace automation technologies, leaving individuals out of work earlier than expected. A new report by the Israel Democracy Institute (IDI) aims to advance policies for the integration and retention of Israeli employees above the age of 50 in the workplace.
While the overall participation rate in Israel’s labor force (80.2%) surpasses the OECD average, significant disparities are identified between age groups. The labor participation rate stands at 85% among 35-44 year olds, but slumps to just 69% among 55-64 year olds and only 16% above the age of 65. In light of current trends, the report’s authors emphasize that significant reforms are required in the labor market.
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