How will the retirement boom affect labour markets?
Although far from a sophisticated approach to labour force forecasting, the following discussion serves to illustrate the impact of the baby boomers’ exit from the labour force. Because people age and retire, rates of labour force participation are much lower for older people than for younger people. Suppose the current rates of labour force participation by age group stay the same.1 Under this simple scenario, the labour force participation rate should fall considerably with the aging of the population. The downward pressure has already begun and should continue for at least the next 25 years. From highs around 67.5% in 2004, the rate in Canada could be around 60% within 20 years, all else being equal. Participation rates in that range would be extremely low for Canada. In fact, they have not been at such a low level since the early 1970s, when women began entering the labour force in large numbers and expanding the labour supply. Whether aging boomers push the relative supply of labo
