Older Workers Are Working More, but Age Segregation in Firms May Be Blocking Job Mobility for Everyone
Work News | New Stardom
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Older adults are staying in the workforce longer than ever. According to the OECD’s latest Employment Outlook, the share of older workers in paid employment has reached a record high across member countries. Labour force participation among workers aged 55 to 74 has risen from 41.4 percent in 2002 to 56.9 percent in 2023. In some countries, over 60 percent of this group is still working.
But while this shift is often cited as a positive response to ageing populations and talent shortages, the 2025 report highlights a more complex picture. A growing concentration of older workers in high-paying firms, paired with a rise in younger workers in low-paying ones, suggests that labour markets are becoming increasingly segregated by age.
The OECD finds that workers over 55 now account for 19 percent of employment in top-wage firms, up from 15 percent in the early 2000s. Meanwhile, workers aged 15 to 34 make up 43 percent of staff in the lowest-wage quintile of firms, compared to just 27 percent in the highest. These patterns are not explained by demographics alone. They point to a growing structural divide between firms where older workers extend their careers and those where younger employees start and often remain.
This form of age sorting, the report suggests, could reduce upward mobility and slow productivity growth across the economy. “This age-based employment segregation has increased slightly since the early 2000s,” the OECD notes. “The empirical literature has not directly addressed the growing segregation of employment by age across firms.”
Unlike geographic or sectoral segmentation, age segregation within firms rarely draws policy attention. But the data points to a new form of labour market rigidity, where younger workers are clustered in low-wage environments with limited exposure to older, more experienced colleagues, and where older workers are disproportionately concentrated in firms already at the top of the wage ladder.
The OECD warns that sustaining employment rates as populations age will require more than keeping older adults in work. It will also demand better firm-level integration, fairer access to high-productivity companies, and policies that support mobility across the firm hierarchy and not only within demographic groups.
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Report: OECD Employment Outlook 2025
Reporting: Sofia Simeonidou
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