Older workers could struggle to find work when furlough ends
A study by the Institute for Fiscal Studies (IFS), funded by the Centre for Ageing Better, found that employees over the age of 65 were 40% more likely to be furloughed in late April than those in their 40s (14% versus 10%).
The IFS warns that we can expect to see increased numbers of older jobseekers as the furlough scheme is wound down, and many may face significant challenges when it comes to finding new jobs.
Before the pandemic, older workers were less likely to return to work after spells of unemployment than younger workers. Among all those unemployed in their late 50s, less than one in three returned to work over the course of a year, compared with about half of those unemployed in their mid-30s.
Among older workers the long-term unemployed are much less likely to re-enter work than those who have recently become unemployed. Those with lower levels of education and women have also historically been particularly less likely to re-enter work after becoming unemployed.
Older worker challenges
There are a number of reasons that finding new work may be challenging for people in their 50s and 60s. Firstly, most older workers don’t have much recent experience of searching for work. More than two-thirds (69%) of 55-year-old workers have been with their employer for more than five years.
Older workers are also less likely than younger workers to change occupation. Only 3% of workers aged 50 to 69 typically change occupation over the course of a year, about half the rate of workers in their mid-30s.
The IFS report also highlights the importance of flexibility in the labour market among older workers, particularly regarding hours of work. Before the pandemic, there was significant appetite for reduced hours among older workers – 16% of 50 to 69-year-olds in paid work wanted to work fewer hours.
Support needed for older jobseekers
Laurence O’Brien, a research economist at IFS and an author of the report, said: “There are a number of reasons that finding new work after the end of the furlough scheme might be challenging for many older jobseekers.
“Many older workers do not have much recent experience of looking for a job. Older workers are also less likely than younger workers to change occupation in normal times – and these transitions may become more important as the economy adjusts after the pandemic. It will therefore be important for the government to appropriately support older jobseekers back into the labour market going forwards.”
Emily Andrews, deputy director of evidence at the Centre for Ageing Better, said: “The picture is currently very worrying for older workers furloughed or made redundant during the pandemic. This new research shows that even before the pandemic, only a third of unemployed people in their late 50s returned to work within a year. In a competitive job market, many older workers are likely to struggle to get back into work.
“It’s vital then that in the wake of the crisis, the right support is in place to get over-50s back to work and prevent them falling into long-term unemployment – which would risk seeing many fall out of the workforce for good.”