India stands at a demographic crossroads. While much attention has been given to its youthful population, the country is also witnessing a significant rise in its elderly demographic. By 2031, over 13 per cent of India’s population will be aged 60 and above.

This shift presents both a challenge and an opportunity. If harnessed effectively, India’s aging workforce could become a powerful economic asset ~ a “silver dividend.” Unfortunately, current policies and labour market structures have yet to fully tap into this potential. Despite increasing life expectancy and improving health conditions, labour force participation among India’s elderly remains low. According to recent surveys, only about a quarter of people aged 65 and above are part of the workforce, with stark differences between rural and urban areas. In rural India, labour force participation among the elderly has risen, more due to necessity than choice. Many older adults in villages continue working in agriculture, construction, or informal service jobs to supplement meagre pensions or inadeqate social security benefits.

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Women, in particular, have seen a notable rise in workforce participation, often driven by economic compulsion. Conversely, in urban areas, elderly workforce participation has stagnated. Retirees from the formal sector often find themselves excluded from re-employment opportunities, despite possessing valuable skills and experience. Unlike developed economies that have structured programmes to reintegrate older professionals into the workforce, India lacks systematic efforts to facilitate second careers for its aging population. Several countries have successfully leveraged their aging workforce through innovative policies. Japan, for instance, has established Senior Human Resource Centres, offering part-time and flexible job opportunities for retirees in sectors like administration, maintenance, and community services. The United States has developed encore career programmes, which enable retirees to take up advisory or mentorship roles.

European nations like Germany and Sweden have flexible retirement policies, allowing older individuals to extend their working lives voluntarily. India can learn from these models and tailor solutions to its own socio-economic realities. For instance, retired professionals from sectors like defence, education, and healthcare can be engaged in mentorship or consulting roles. The corporate sector can introduce phased retirement programmes, allowing employees to transition gradually rather than exiting the workforce entirely.

To harness the silver dividend, India needs a multi-pronged strategy. First, social security programmes must be expanded to ensure financial stability, reducing the need for elderly individuals to engage in low-paying and physically demanding jobs. Secondly, reskilling programmes should be introduced to help older workers transition into new roles, especially in the digital economy. Thirdly, labour laws should be reformed to promote age-friendly workplaces and flexible work arrangements. India has long benefited from its youthful workforce, but the time has come to recognise the economic value of its aging population. With the right policies, the country can transform its growing elderly demographic from a perceived burden into a productive and engaged segment of the economy