losing the returns to investment if other firms “poach” the skilled workers, and more generally due to high worker turnover. Managers may lack accurate information about what skills will be needed, the value of training for productivity, earnings, and employability, or what training opportunities are available.<sup>108</sup> Financial institutions that likewise lack understanding about training and the impact on productivity can restrict credit for training purposes. Coordination failures arise when firms cannot find productive workers and therefore cannot increase pay, whereas workers underinvest in skills because they will not be rewarded, and the training offer remains underdeveloped. In principle, the time horizon for reaping the benefits of skills investments by firms is shorter for mature workers, which may also create disincentives to invest in their skills.

**Firms may also underinvest in other complementary strategies that are valuable to increase the productivity of older workers** . Relevant technology tools, more ergonomic working conditions, health literacy, and other health interventions, as well as organizational changes such as multi-age teams or flexible working arrangements may be needed. As in the case of skills, firms may lack the knowledge or resources for such investments.<sup>109</sup>

Intermediation – Effective matching services for mature workers Even when mature workers have the necessary skills and health, and firms are prepared to hire them, the search and matching process between jobs and workers in the labor market may be costly and lengthy, particularly for older workers.

**Public and private employment services may have limited capacity to serve older workers.** Public employment services exist in most developing countries (nearly 80 percent in 2020), and a majority provide both job placement, counseling, and training services.<sup>110</sup> However, official retirement age is often set as the upper age limit for program eligibility, excluding older workers. Moreover, services such as job search support or training may be poorly adapted to older workers. Caseloads for employment service case workers often exceed the levels recommended by the ILO (1:100), suggesting limited capacity to provide tailored services to a group with specific training and other needs. The increase in e-government services in high- and middle-income countries needs careful design and outreach efforts to reach mature workers. A study of employment services’ self-service tools in the United States found that these features were least used by mature workers precisely because of lower digital skills.<sup>111</sup> The risk of exclusion may be even higher in L/MIC settings, given lower levels of education and skills. Digital gaps are likely to have worsened the impact of COVID-19 on mature workers’ employability as employment support often moved online.

**Lack of job and career search skills among mature workers may also be holding back matching opportunities** . Digital skills are increasingly important in identifying and applying for job opportunities (as well as increasingly important for the job itself). However, globally, digital literacy is lower in the older generation<sup>112</sup> and the gaps are likely to be higher in L/MICs, where age-related gaps in literacy and education are also higher.

> 108 Almeida et al. 2012. 109 Söderbacka et al. 2020, EU-OSHA 2016. 110 Estimates based on World Bank Unemployment Protection and Employment Services Database. 111 D’Amico et al. 2009.

> 112 ITU 2021.

21