The impact of the working longevity of the “silver generation” on the Kazakhstani labor market

Abstract

Object: To study the impact of demographic trends on the labor market in the context of the labor activity of the older generation in Kazakhstan and to conduct a comparative analysis of the employment indicators of older people.

Methods: methods of system, dynamic and structural analysis, and correlation analysis.

Findings: The results of the analysis allow us to conclude that the aging process of the population actualizes the labor activity of the older population, and determines the formation of support for stimulating the employment of older people.

Conclusions: Thus, the role of the older generation in the labor market is being scaled, and therefore it is necessary to consider labor activity in retirement age as an element of the formation of the lifestyle of the older generation, where the role of labor as a factor of active longevity is given a special place. The creation of working conditions necessary for the use of working capacity is a long-term goal in ensuring active longevity and meeting the needs of older people in socially significant activities

Introduction

The change in the age structure of society as the share of older people increases, its overall composition, is a trend that characterizes the demographic situation in many countries. Therefore, the main task of today is to find ways to take this trend into account in public practice when planning and predicting social development and social policy in the near and long term. Based on the general trend of aging, the need to actively involve people of the “silver generation” in work activities increases (Report UN, 2012).

By 2050, every sixth person in the world will be over the age of 65 (16%). According to forecasts, in the period from 2019 to 2050, the share of the population aged 65 and older will double, including North Africa and West Asia, Central and South Asia, East and Southeast Asia, as well as Latin America and the Caribbean.

By 2050, one in four people living in Europe and North America may be 65 years old or older. In 2018, for the first time in history, the number of people aged 65 and older exceeded the number of children under the age of five. The number of people aged 80 and older is projected to rise from 143 million in 2019 to 426 million in 2050.

Economists are very concerned about the problem of population aging. An increasing proportion of older people reduce labor productivity and total consumption, so many researchers point to changes in the age structure as one of the main reasons for the decline in economic growth in developed economies in the XXI century.

The increase in life expectancy should be aimed at increasing the long-term participation of the elderly in the field of socially useful work, which will change the current perception of older people as a burden on society. To do this, it is necessary to create and maintain such conditions that would allow them to remain useful to society for longer.

The economic side of the problems of population aging is becoming the most relevant and discussed topic. It should be noted that the coronavirus infection has made its own adjustments to the structure of the labor market in all countries, especially affecting changes in the employment of the “silver generation”, which are one of the main risk groups during the pandemic.

Now the main question of our consideration arises, how will the labor activity of the population of retirement age affect the Kazakhstan labor market.

Literature Review

The declaration of the leaders of the "Group of Twenty" countries, adopted at the Osaka summit (Japan, 2019), noted that the aging of the population in the G20 member countries is taking place at different rates. Taking into account the common features and differences in the demographic structure of the "Group of Twenty" countries, it recognized the importance of promoting a healthy and active society of the elderly, allowing workers to participate in the elderly labor market, while continuing to expand the participation of young people, women and disabled people in economic activities. It will be encouraged to create jobs and flexible labor organization, improve the quality of employment through lifelong training and expand employment opportunities for employees, as working life will be longer and will strive to improve working conditions for all, including long-term care workers in accordance with national conditions (G20 Osaka Leaders’ Declaration, 2019).

The UN edition of "World Population Prospects 2019: Highlights" highlighted one of the key findings that the world's population is high and that people over the age of 65 are the fastest growing age group.

In recent years, the aging trend has led to some global response measures. The political declaration Madrid International Plan of Action on Ageing, adopted by 160 UN member states in 2002, have become the new agenda on Aging in the XXI Century. The recommendations of these documents identify three priority areas of activity:

• participation in the development of older people;
• protecting the health and well-being of the elderly population;
• providing wide opportunities and favorable conditions for the elderly (Madrid International Plan of Action on Ageing, 2002).

As Kolosnitsyna M.G. and Gerasimenko M.A. note, the resource potential of the older generation is now more efficient than in previous years. Also, the active participation of older people in the labor force is a favorable factor for longevity and solving problems in the labor market (Kolosnicyna M.G., Gerasimenko M.A., 2014)

The conducted assessment of M.L. Agranovich, where the relative chances of employment of men and women of “silver age” by education levels and the interregional variation of this coefficient were studied, showed that the economic activity of the population of retirement age, especially men, is significantly lower than the average of this category (Agranovich N. V. et al., 2012).

I.M. Kozina and I.K. Zangieva define the existing mechanisms of labor activity regulation as neutral in relation to the age group. In addition, labor market agents form their own judgments about the appropriate age limit for employment, thereby expanding the spread of ageism. As a result, the labor market is characterized by age segmentation, which is accompanied by changes in the labor activity of pensioners (Kozina I.M., Zangieva I.K., 2018).

The works of scientists devoted to the analysis of labor behavior of persons of older age groups in the market cover a wide range of issues. The socio-economic situation of older persons and their role in the labor market are considered by R.I. Kapelyushnikov, V. Gimpelson, A.N. Chelombitko, O.V. Krasnova, V.Yu. Lyashok and others (Gimpelson V., 2017; Chelombitko A.N. 2018; Lyashok V.Yu., 2018).

As R.B. Sarsembayeva and Zh.D. Kusmangalieva note, the process of population aging is a relatively new phenomenon for Kazakhstan. Therefore, this problem is a little-studied area in the country (Sarsembayeva R.B., Kusmangalieva Zh.D. 2010).

Methods

The official datas of the Bureau of National statistics of Agency for Strategic planning and reforms of the Republic of Kazakhstan and the UN Department of Economic and Social Affairs of the Population were used for the analysis.

The methods of dynamic and structural analysis were used in the processing of statistical and departmental data describing the quantitative parameters of the participation of the older generation in the labor market in Kazakhstan. The factors influencing the aging of the population in Kazakhstan were identified on the basis of a correlation analysis.

Results

According to the above, various aspects of the problem of aging are of great interest to Kazakhstan. In our country, significant changes in the age structure of the labor force are also taking place in the future. Such changes have a number of significant economic and social consequences, which require significant adjustments to the state budget and Financial Policy, and adequate measures to be taken in the labor market (Figure 1).

2011-2019 in the Republic of Kazakhstan the share of elderly people in the total number increased from 6.5% to 7.5%. According to the demographic scale developed by UN experts, this indicator shows that the population is on the verge of old age.

Based on the conducted correlation analysis, we can say that the main factors of aging of the population in Kazakhstan are such factors as the number of people leaving the country aged 15-45 years and an increase in life expectancy.

Thus, the importance and role of the older generation in social development and participation in the labor force increases, which justifies the need to create favorable conditions for the realization of its resource potential.

In the course of such demographic changes, a huge financial burden falls on young groups. This is reflected, in particular, in the dynamics of the dependence indicator (the ratio of the number of people over the age of 65 to the population aged 20-64) (Figure 2).

This age shift is based on demographic reasons, such as the transition of "baby boomers" to older age, a decrease in the birth rate typical of many countries, and an increase in life expectancy at older age. That is, the descendants of baby boomers are people born from 1946 to 1964. This age group got its name due to the increase in the birth rate, which occurred immediately after the Second World War.

Compared to previous years, the resource potential of the older generation is now more effective. Also, the active participation of older people in labor activities is a favorable factor for longevity and solving problems in the labor market.

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In the structure of the employed population, the main share is 78.2% of people aged 25-54 years, 11.5% - young people aged 15-24 years, 9.6% - 55-64 years and 0.6% – young people aged 65 and older.

The highest indicator of employment of pensioners for the period under review was observed in 2016, which amounted to 62.7 thousand people. However, in recent years, the number of employed elderly people has decreased, one of the reasons is a gradual increase in the retirement age of women (in accordance with the Law "On pension provision in the Republic of Kazakhstan" from January 1, 2018 to 2027, for 10 years, the pension age for women will increase by 6 months).

In the structure of the employed population, the age group of 65 years and older has a large share of self-employment (Table 1).

Table 1. Age indicators of the self-employed population, number of people

For example, if we compare the age indicators of the self-employed population in 2011 and 2019, the number of citizens aged 65+ decreased by about 10 thousand people compared to other age groups.

A significant proportion of the population aged 65 + is employed in agriculture, forestry and Fisheries. At the same time, during the period under review, this type of economic activity took a leading position in this age group, but in recent years there has been a decrease in the number of employed citizens of the “silver generation” (Figure 4).

Note - Information-analytical system of the Bureau of National statistics Of the Agency for strategic planning and reforms of the Republic of Kazakhstan

2011-2019 the number of employed people aged 65+ has decreased in many economic activities. For example, in industry, art, entertainment and recreation, it decreased by 2 times. On the contrary, the number of people employed in the wholesale and retail trade; repair of cars and motorcycles, transport and warehousing, accommodation and catering services has increased (Figure 5).

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Stimulating material interest remains one of the main drivers of the continuation of work activities of older people. Within the framework of economic theory, a pension is one example of income without work. When an individual begins to receive a pension, his economic activity should decrease as a result of the impact of income. If the amount of pension payments is increased, the same effect applies to pensioners. In addition, existing pension payment restrictions in different countries of the world present serious difficulties for researchers in assessing the net impact of income from changes in the size of pensions on the economic activity of older people.

The results obtained show that the employment of pensioners largely depends on the level of pension provision, which is fully consistent with various sociological studies of labor discipline in the older generation

Discussions

The negative consequences of aging can at least be partially offset by measures aimed at mobilizing all reserves of the labor force, including increasing the economic activity of representatives of older groups.

The implementation of the active aging strategy is an effective tool for solving current and future problems in the field of well-being associated with the aging of the population.

Older people have accumulated the potential of education and health today, which provides an objective basis for further expanding their work activity. The task of the state is to help realize this potential by making the widest possible use of available tools that stimulate the supply and demand of older people's labor.

In recent years, most countries have been gradually increasing the retirement age due to an increase in life expectancy and the economic situation, and the change has had a greater impact on women. This process is also a significant factor in the work of the older generation.

Active employment of the older population can be a driver for solving the issues that arise with the demographic aging of the population. However, the labor activity of the “silver generation” can also affect the indicators of youth unemployment, thereby increasing the number of NEET youth, i.e. young people who are not engaged in labor and educational processes.

Equally important is the fact that in recent years, the participation of young people in industry segments similar to older generations has been declining, changing the vector of labor activity, thereby giving way to jobs for the older age group. Thus, the competition between the older and younger generations in the labor market is not significant.

There are several main drivers that affect the aging process: an increase in life expectancy and a decrease in the birth rate. Studying the aging process of the population as a whole as an increasing phenomenon in society, it is necessary to take more account of all the results of the current demographic changes in order to make this process a driver of the social formation of the state, which can affect the acceleration of socioeconomic progress.

In developed countries, various forms and methods are used to stimulate the employment of the elderly. In most countries, reforms have been implemented in recent years to continue the work activity of older people.

The National Concept of Social Development of the Republic of Kazakhstan until 2030 defines the main socio-economic conditions for the development of human capital. And one of the tasks of the social development model of Kazakhstan is to ensure a decent life for elderly citizens. Thus, elderly citizens will be provided with new opportunities for self-realization. The pension system will guarantee the preservation of the socio-economic status acquired in the course of work, at retirement. Every person, regardless of their life achievements, will have the opportunity to lead a decent lifestyle at the expense of pension savings. Persons of all ages will have the opportunity to participate in the socio-economic life of society. Self-realization of older people will allow them to preserve and use the invaluable life and professional experience they have accumulated, and to improve their standard of living [15]. Kazakhstan has approved the National Action Plan for Improving the situation of older Citizens "Active Longevity" in the Republic of Kazakhstan until 2025 [16].

Conclusions

In the future, the problem of employment of the population will manifest itself as a social problem. The involvement of older people in the national economy should be determined not by the peculiarities of the current demographic situation, but by the need and interests to maximize the use of the Labor potential of all members of society, the need to consider labor activity of retirement age as an element of the lifestyle formation of the older generation, where the role of labor as a factor of active longevity occupies a special place.

In general, the global world is looking for new sources of growth, and one of them is the development of the "silver economy" (that is, an economic model within which a significant place is given to the real elderly). By remaining in the labor market, older people will increase their income, finance will become independent, the economy will have an increase in domestic demand, the state budget will have an increase in tax revenues and a decrease in pension expenditures

Kazakhstan is moving along the flow of global trends, which means that the role of older citizens in the economic and social life of the country is increasing. Today, the well - being of many states - financial and social well-being-depends on how comfortable conditions are created for them to realize the professional and intellectual potential of "third-year" citizens. Therefore, foreign experience related to stimulating the social and economic activity of older people is of great interest to Kazakhstani specialists, and first of all, the experience aimed at increasing the labor activity of the older generation is of great importance.

Thus, the importance and role of the older generation in social development and participation in the labor force increases, which justifies the need to create favorable conditions for the realization of its resource potential.

In conclusion, we can say that the state has at its disposal a large set of tools for implementing the employment policy of the older population:

• legislation: anti-discrimination laws, employment protection legislation, changing the parameters of the current pension system;
• financial instruments: influence on the behavior of employees and/or employers , including in kind, through taxes, subsidies (for example, state funding of educational programs for the elderly);
• information campaigns: changing the attitude of society (employers, colleagues) to older employees, including through the media;
• the ability to act as a large employer: that is, the state is a model of attitude to older employees for other sectors of the economy (lack of discrimination in hiring, promotion, training, staff reduction).

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