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Free Malaysia Today
a day ago
- Business
- Free Malaysia Today
Retirement age hike won't harm young jobseekers, says World Bank economist
World Bank senior economist for social protection and jobs in the East Asia and Pacific region, Matthew Dornan, said older workers who stayed employed continued to spend money, which helped support the economy and create more jobs. KUALA LUMPUR : Raising the retirement age in Malaysia will not reduce job opportunities for young people, World Bank senior economist for social protection and jobs in the East Asia and Pacific region, Matthew Dornan said today. Speaking at EPF's International Social Well-being Conference here today, Dornan said the belief that older workers would take away jobs from younger ones was a common misconception. 'There isn't a fixed number of jobs in the economy,' he said during his keynote speech titled 'Labour and longevity: Responding to the challenge of an ageing population.' He said older workers who stayed employed continued to spend money, which helped support the economy and create more jobs, including for younger workers. Dornan said studies showed that this trend was also true in Malaysia, except in sectors such as the civil service where employment might be capped. He said many countries had raised their retirement age as the population aged, adding that Malaysia did the same when it gradually increased the minimum retirement age from 55 to 60. Dornan said any further increase should be gradual and fair, possibly with different rules for different age groups, to allow time for adjustment and reduce public backlash. He also suggested linking the retirement age to life expectancy, as done in some developed countries, to prevent it becoming politicised. Yesterday, EPF CEO Ahmad Zulqarnain Onn said that life expectancy in Malaysia had increased from 54 years in the 1950s to 75 today, and was projected to hit 81 by 2050. Dornan warned that allowing early access to pension funds might lead to inadequate savings in old age, as some might spend the money too early. AdChoices ADVERTISING He added that while retirement policies mainly affected formal workers, many informal workers in Malaysia continued working beyond 60 out of necessity. Last month, law and institutional reform minister Azalina Othman Said proposed that the government study extending the retirement age to 65, noting that many Malaysians remained active and capable well into their 60s. In 2014, Malaysia raised the retirement age to 60 for both public and private sectors, up from 58 and 55 respectively, to promote financial security and active ageing.
New Straits Times
2 days ago
- Business
- New Straits Times
World Bank addresses (mis)perception of higher retirement age limiting jobs for younger workers
KUALA LUMPUR: The perception that increasing the retirement age will restrict job opportunities for younger workers is inaccurate and not supported by economic evidence, a senior World Bank economist said. World Bank senior economist for social protection and jobs for East Asia and Pacific region Dr Matthew Dornan said this stems from the misconception that the number of jobs in an economy is fixed. "In reality, the number of jobs in an economy is not static. It evolves based on market demand and economic growth," he said at the International Social Wellbeing Conference 2025 by the Employees' Provident Fund (EPF) here today. Dornan said studies have shown older workers remaining in the labour market do not significantly reduce overall job opportunities for younger individuals. Elaborating further, he noted that the presence of older workers in the workforce can have a multiplier effect on job creation. "When older workers remain employed, they have income to spend, and this spending drives demand for goods and services often provided by younger workers," he said. The chain reaction, he added, stimulates economic activity, ultimately leading to the creation of more job opportunities across various sectors. On proposals to raise the retirement age, Dornan said such measures might become necessary in the future to ensure the nation's economic stability, particularly as the population continues to age. He highlighted that many countries have already adopted similar approaches, establishing a retirement age of around 65 years as the new norm. However, he said any decision on retirement age must be made with careful consideration and tailored to Malaysia's specific context and needs. "Typically, countries implement retirement age increases gradually to avoid system shocks and ensure smooth transitions," he said. Dornan recommended that Malaysia evaluate structural labour market factors, fiscal sustainability and citizens' life expectancy before making decisions related to retirement age policies.
