somewhat serious or very serious obstacle to working for 82 percent of respondents.<sup>82</sup> Research on the impact of safe, affordable, reliable, and effective transport systems for elderly is lacking. However, limited access to safe transportation is estimated to be a major constraint for women’s participation in labor markets, reducing their participation probability by 17 percent.<sup>83</sup> Underdeveloped transport systems in L/MICs are likely to similarly reduce access to work for the older population.

# **Psychosocial factors may generate additional disincentives for work.** If individuals internalize social

norms and stereotypes around age versus capabilities, responsibilities, and work, their incentives and even capacity to work may be reduced. Individuals who self-identify as being older risk considering that they are too old for certain jobs, for changing jobs, for promotion, or for developing their skills further, and that they should not crowd out the younger generation.<sup>84</sup> There is evidence, for example, that “health pessimistic” individuals prefer exiting the labor force earlier than others, even when actual health levels are not different from other workers. Unsurprisingly, those with higher education and income appear to have more positive self-perceptions of aging than people with lower incomes and education.<sup>85</sup> Gender and social class also influence own perceptions of optimal exit age.<sup>86</sup>

**Beyond issues of regulations, incentives, and other barriers, mature workers often underinvest in skills development in ways that hamper their labor market prospects and lower the opportunity cost of retiring.** Although skills upgrading is essential to remaining relevant in labor markets, participation in adult learning is low overall, especially for mature workers and in L/MICs. Figure 7 shows, for EU member countries as well as five European MICs, that (i) training is lower in the European MICs than in the EU HICs, but (ii) the incidence of training monotonically falls with age across all countries. Low incidence of training is partly due to underdeveloped labor market and career guidance information systems and services and limited and fragmented markets for training (including for firm-provided training, discussed below). However, even where subsidized adult training programs are provided, take-up is often low,<sup>87</sup> and there is some evidence that the mature workers who would be most in need of upskilling – those with lower levels of education and lower wages – may also be the least interested in or able to participate in training.<sup>88</sup> Workers may lack information on the value of training, what skills to acquire, or what training opportunities are available. Retraining at older ages may also seem more challenging, discouraging take-up. Workers may choose to not invest in training if they will not receive fair remuneration for their higher productivity.<sup>89</sup> Lack of training is arguably particularly problematic in L/MICs, where human capital among workers is lower overall and intergenerational human capital gaps are high. Since skills development is often cumulative and skills demand can change quickly, the skills gap is likely to compound over time.

> 82 NCST 2011. 83 ILO 2017. 84 Vickerstaff and Van der Horst 2021. 85 WHO 2021. 86 van der Horst 2019.

> 87 World Bank 2019. 88 Generation 21 2021. 89 Almeida et al. 2012.

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