The discussion of the effects of a maturing labour force on Canadian economy has been an age old issue. In this essay we will discuss the advantages and disadvantages of an ageing workforce with regards to Canada, on the grounds of labour supply issues, their quality and the costs and benefits associated.

With the workforce ageing there is an increase in the rate of retention of employment. Older employees are loyal to their employers, which in turn increases economic stability. This results in a negligible level of fluctuation in the employed market. As the number of people leaving their jobs lowers, turnover costs are lower, reducing recruitment and training. The older employees retain their experience and invaluable skills. Hence one can conclude that an ageing working population will save a substantial sum of money.

On the other hand, the elder employees will result in a severe issue of labour supply. When the baby boomers reach retirement, there won’t be enough younger workers to substitute them. There have been roughly 1.5 million new entrants into the labour markets in the decade following 1994; whereas between 2020 and 2030 the workforce will increase by only 150,000. This statistic shows by just how much the labour supply will decrease in the coming years.The ageing population will also lessen the participation rate in the coming years, as when workers get older they have a tendency to to give up working.

An aged workforce will lead to serious skill deficiencies. The older the work force gets the lower the productivity rate is. Ageing workers are more susceptible to sickness and disabilities that will lessen the productivity rate.

The increase in age of the workforce increases the dependence ratio, which means fewer people will be supporting a larger portion