HR Alert: Ageism to Cost OECD $500B in Lost Productivity by 2040

A new report from the World Economic Forum and Marsh has quantified the staggering economic toll of workplace ageism, projecting that OECD economies will suffer nearly $500 billion in cumulative productivity losses by 2040. The losses stem from extended unemployment and underemployment of adults aged 55 and older, a group that is often sidelined by structural barriers and discriminatory practices despite the world's rapidly aging population. By 2040, the global population aged 65 and over will surge by more than 50 percent, from 856 million to 1.3 billion, while the working-age population (25-64) grows by just 13 percent. This demographic imbalance is already straining labor markets, and the failure to integrate older workers is turning what could be an extended career dividend into a massive economic drag. The report breaks down the projected losses country by country for the 2025-2040 period. The United States faces the largest nominal hit at $113 billion, followed closely by France at $106 billion and Brazil at $105.8 billion. Other significant impacts include the United Kingdom ($25.6 billion), the Netherlands ($26.3 billion), Canada ($7.5 billion), and Japan ($5.9 billion). These figures only capture the direct GDP gap from lower employment rates, but the true cost is likely far greater because many discouraged older workers drop out of the labor force altogether, rendering their untapped contributions invisible to standard unemployment metrics. Beyond lost output, the report links ageism to stark health and wellness consequences. Research cited indicates that ageism is associated with 17 million incidences of disease in the United States alone, and in 2018 it added at least $63 billion in extra health costs in the US. The psychological toll—depression, reduced access to healthcare, and physical illness—further erodes both individual well-being and societal productivity. The WEF emphasizes that the numbers are 'just the tip of the iceberg' because they ignore the cumulative effect of years of underemployment, skills atrophy, and forced early retirement. The report arrives at a critical juncture. As pension systems come under pressure and labor shortages become chronic in many developed economies, keeping older workers sidelined is an increasingly untenable strategy. Forward-looking companies and policymakers are beginning to recognize that retaining and retraining workers past traditional retirement age is not just a social good but a necessity for economic resilience. The OECD's $500 billion warning serves as a clarion call for comprehensive age-inclusive policies—from flexible work arrangements and lifelong learning programs to age-diverse hiring mandates and re-skilling initiatives. Without such measures, the demographic wave will crash onto unprepared economies, amplifying national debt burdens and sapping growth potential for decades. The path forward demands a shift in narrative: older workers are not a burden but a reservoir of experience, mentorship, and steady participation that can help offset the shrinking youth workforce. The $500 billion figure, while daunting, is ultimately a measure of opportunity lost—and a roadmap for where to start reclaiming it.