How would a shrinking workforce pay for the pensions of the over-65s in countries with low fertility rates?
Firstly, in the case of the UK the workforce is not shrinking and is not expected to shrink for about 20 years (even under the OPT Population Policy Projection A scenario). The support ratio – the numbers of working age in relation to young and old dependants – is not expected to worsen before 2012. As the state pension age for women rises to 65 the workforce will continue to grow. After about 20 years, it may fall. To get this problem into perspective, we believe it is important to remember that there are three main types of dependants in modern society: the old, the young and the unemployed. The first way to resolve the problem is to enable more unemployed people to get back to work, which can be done by more efficient labour market management, particularly by improving labour mobility and making more part-time jobs available to older workers. (The separate problem of falling pension values can only be solved by longer-term saving, extension of working lives, specific pension legal a
