Singapore’s population is ageing rapidly. Understanding the effects of ageing on individuals’ labour market outcomes, as well as the channels through which these effects occur, can help policymakers to design more effective policies to support older workers as they age. The key channels examined in this study are human capital accumulation, health conditions and preferences for retirement. The study also examines how job characteristics can help to mediate the effects of ageing on labour market outcomes.

The key findings of the study are as follows. First, older workers are likely to accumulate human capital as they age, which in turn enables them to command higher hourly wages, especially if they stay within the same firm. Second, a deterioration in health conditions can negatively affect older workers’ ability to remain in employment, as well as to maintain their wage levels, likely reflecting a reduction in productivity at work. Third, transitioning into partial retirement, the availability of flexible work arrangements, or having the option to work as own-account workers or employers, can potentially allow older workers to flexibly adjust their hours worked without a decline in hourly wages. Finally, there is some evidence that the re-employment age has been effective in encouraging older workers to continue to work until 67.

The views expressed in this paper are solely those of the author and do not necessarily reflect those of the Ministry of Trade and Industry (MTI) or the Government of Singapore.

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