the informal sector—given the lack of access to social protection and overall low levels of private savings—arguably already work too late in life, caught in a vicious circle of ill-health and low productivity and straining work, leading to even worse physical and mental health.

**Increasing the productivity of low-productivity mature workers in L/MICs would likely be difficult, given health and education gaps and lower life expectancy** . As access to education and health has expanded over the past decades, inter-generational gaps in education and health are also significant. In a country like Vietnam, which has undergone a remarkable upskilling effort in past decades, over 60 percent of those over age 60 have only completed primary education, whereas the vast majority of young people have at least higher secondary education.<sup>13</sup> In many L/MICs, human capital levels in the younger generations, while increasing, remain insufficient and need to increase substantially, however, raising the urgency of investing in children and youth who make up the future workforce.

**Despite these caveats, there are strong reasons to form productive longevity policies for workers who have higher human capital levels and resources to retire.** This group always exists: in many LICs, likely represented by public sector workers; in MICs, a larger share is likely to come from the formal private sector. For this group, the policy agenda could more closely follow that of advanced economies and focus on extending working lives. Although early investment is critical, fostering skills development throughout working lives may be more efficient than has previously been considered, not least because a person over her lifetime generally spends much more time at work than in school. Research shows that returns to work experience may explain as much of the income gap between HICs and L/MICs as gaps in education: workers in L/MICs develop less human capital on the job than do workers in HICs.<sup>14</sup> In addition, the hiring rate of mature workers may in fact be higher in L/MICs than in HICs.<sup>15</sup> This higher dynamism suggests significant pay-offs to investing in human capital and adequate employment transition.

**L/MICs hence face a more comprehensive policy agenda than HICs, with both opportunities and risks.** A significant part of the challenge of productive aging in L/MICs is clearly about investing in children and youth and increasing productivity and boosting social protection and health support among older workers, often in informal, low-productivity employment. But there are also opportunities for developing policies addressed to mature workers. In this paper, we discuss the evidence for measures that aim to extend working lives though policy instruments that apply mostly to formal work as well as for measures that can support more productive employment in both the formal and informal sectors. In doing so, we recognize that the profile and context for mature workers today are different from those of the past and certainly likely to differ from those of tomorrow. The policy evidence reported should be considered in this light.

# 3. Work in old age – Some stylized facts

This section presents some stylized facts regarding the nature of work among mature workers, looking at participation patterns and trends and the development of human capital - in the form of access to

> 14 Jedwab et al. 2021.

> 15 Annex Table 1 shows that in several middle-income countries (Brazil, Colombia), the hiring rate of 55-64 year olds is much higher (34 and 24 percent respectively) than in EU27 or OECD countries (6 and 8 percent).

13 World Bank 2021a.

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