Only one out of ten retirees continues to work.

Greece’s Labor Market Struggles with Aging Population

Greece is grappling with significant challenges related to its aging population, yet it’s not fully leveraging either its younger or older workforce like other developed nations do.

Youth unemployment in Greece hovers around 20%, while a mere 10% of retirees choose to remain in the workforce. Interestingly, the participation rate for women in the labor force stands at 11%, exceeding the 6.5% average seen in the euro zone.

Many OECD countries provide incentives for seniors to extend their working lives across various sectors, except those demanding physical capabilities that older employees may lack. However, Greece, along with Belgium, Luxembourg, and Turkey, offers “low or non-existent” bonuses for those who wish to work beyond retirement age, according to OECD findings.

In Greece, only 10% of retirees manage to balance work with their pension benefits. It’s notable that Greece is among ten countries where individuals working past the legal retirement age must still pay pension contributions, often interpreted as a type of tax on their earnings.

Greece and Spain impose additional contributions of 10% and 9% respectively, based on income, without resulting in higher pensions. In contrast, countries like the Czech Republic encourage active pensioners by exempting them from pension contribution obligations, while keeping the employer contributions steady. The relatively low wages in Greece, especially when compared to international standards, might further discourage seniors from seeking work, resulting in limited opportunities.

Even with rising life expectancy and a labor shortage stemming from population decline, Greece’s economy shows minimal engagement from retirees, while nearly 20% of youth remains outside the workforce. Specifically, the unemployment rate for those under 25 is 18.8%, which is higher than the euro area average of 14.4%. For women, the unemployment rate in Greece is 10.9%, compared to just 6.5% in the euro zone.