Ageing Workers in East Asia Are Essential. More Are Needed.

Ageing workers in East Asia are becoming increasingly essential, yet labour markets and social systems are not well designed to make full use of them. Lots of older people continue working despite having sufficient pension income, illustrating a broader trend: people are living longer, staying healthier, and working later in life. In Japan and South Korea—two of the world’s fastest-ageing societies—over a quarter of Japanese and nearly 40% of South Koreans aged 65+ remain in the workforce, among the highest rates in the OECD.

However, many older workers remain employed out of financial necessity. In Japan, more than half of elderly workers say they work for income, while in South Korea inadequate pensions mean many seniors face significant financial pressure. As a result, a large share of older South Koreans earn less than half the median income. At the same time, social expectations around retirement are shifting, with growing recognition that people in their 60s and beyond can still lead active, productive lives.

Work also provides non-financial benefits. Many older individuals value employment for its role in maintaining physical health, mental sharpness, and social connection. Studies suggest that those who continue working tend to be less frail and less prone to depression, though causality is unclear.

Despite this, structural barriers remain significant. Labour markets in both countries are still shaped by seniority-based wage systems, making older workers expensive to retain in full-time roles. As a result, many are rehired after retirement on temporary contracts with lower pay and reduced responsibilities. Age discrimination is also widespread, and there is often a mismatch between the skills older workers possess and the types of jobs available, which tend to be lower-skilled or physically demanding.

Governments have introduced various policies to address these issues. South Korea funds large-scale part-time employment programs for seniors, while Japan operates over 1,300 “Silver Human Resource Centres” to match older individuals with work opportunities. Both countries have also raised or are encouraging increases in retirement ages.

Nevertheless, these measures do not fully address the deeper challenge: how to redesign labour markets and social systems to better integrate older workers. Maximising their contribution while supporting those unable to work will require more fundamental reforms. This includes rethinking career structures so that later stages of working life are treated less as an endpoint and more as a new beginning, with opportunities for retraining, role adjustment, and continued participation in the economy.

Source:

https://economist.com/asia/2026/04/27/ageing-workers-in-east-asia-are-essential-more-are-needed

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