“If we could reduce the unemployment rate of 55-64-year-olds by just two points of percentage, around 14,000 more people would be employed, based on August’s labor survey. This could have an impact of roughly 400 million euros on public finances,” estimates Elias Erämaja, chief economist of Suomen Ekonomit (Business School Graduates in Finland).
According to the August labor survey, the unemployment rate for those aged 55–64 in Finland was 8.3%, compared to 5.7% for the 45–54 age group. Over the past five years, the gap between these two age groups averages to two percentage points.
Is this gap in unemployment due to discrimination?
While there are many reasons for the difference, age discrimination is likely one contributing factor.
A recent study by Suomen Ekonomit found that experiences of age discrimination increased significantly after the age of 55. Respondents aged 50–54 reported less discrimination, both at work and while applying for jobs, compared to those older than 55.
Among all respondents over 50, 38% felt they had been discriminated against in job applications because of their age. The rate was especially high among unemployed job seekers, with a staggering 84% reporting experiences of age-related discrimination during the job search process.
Erämaja believes that experiences of ageism likely slow down or even block the movement of workers within the labor market, leading to rigidity. Many experts find themselves stuck in one position against their will.
“For the economy to function well, it’s important that resources are allocated efficiently. In simpler terms, the right people need to be in the right jobs at the right time.”
If this doesn’t happen, the effects on employment and economic growth are obvious.
People over 55 are part of the solution
Tackling age discrimination would likely increase the supply of labor. In August, the employment rate for those aged 55–64 was 70.9%, compared to 83.6% for those aged 45–54.
“Older workers should be seen as a key part of the solution, especially as the government aims to raise the employment rate to 80% in the long run. It’s essential for public finances,” says Erämaja.
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