66% of people between 55 and 65 years old, at risk of not obtaining a pension

The recovery of the labor market continues, but does not finish overcoming the damage caused by the pandemic, because it left some challenges to solve, according to a study of Asofunds.

It points out, for example, that in the first quarter of the year, despite the recovery presented, the participation of people between 55 and 65 years of age continues at lower levels compared to a pre-pandemic period (6.9 percentage points of difference).

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It says that the Employment Rate of the same population is still 7.9 percentage points below the level in 2019. A similar phenomenon occurred in the population over 65 years of age.

One aspect that he mentions as important is that two out of three people between 55 and 65 years of age do not contribute to a pension. “This shows the vulnerability of this population that is about to reach pension age but may not be able to retire due to the contribution requirement.”, says the study.

Remember that the Unemployment Rate in the first quarter of 2022 stood at 13.2%, which still does not reach pre-pandemic levels (11.5% in the first quarter of 2019). The Occupancy Rate was 55% and the General Participation Rate was 63.4%, lower levels than those presented in years without covid-19.

In the national total in the first quarter of 2022, the Unemployment Rate presented a downward behavior and stood at 12.1%, which represents a decrease of 2.6 percentage points compared to the same month of 2021 (14.7 %).

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The Asofunds study says that the behavior in the first quarter of the year is evidence of the broad recovery that the labor market has had but that There is still a lot of work to do to stabilize and reduce unemployment.

2022 began with an Occupancy Rate of 53.4% ​​and in March it stood at 55.8%. On average for the first quarter of the year, it stood at 55%, an increase of 3.2 percentage points compared to the first quarter of 2021. Despite this improvement, pre-pandemic levels (60.4%) have not yet been reached.

Also, it says that in recent months there has been an increase in the population working or looking for work, however, it is not possible to reach the levels of participation that existed before the pandemic.

Although the labor market has shown a broad recovery in recent periods, adults between 55 and 65 years old continue to show less participation than they had before the pandemic.

(See: What you should know if you want to contribute to a pension from abroad).

The Unemployment Rate presents a difference of -4 percentage points with respect to the national total in this moving quarter.

For Asofunds, these differences in unemployment with the national total are largely explained by the decrease in participation in the labor market of people in this age range.

In the labor market of older adults, that is, people over 65 years of age, there is evidence of a Global Participation Rate and an Employment Rate that is quite low compared to the national total, being 21.7% and 20.1% respectively for the January-March 2022 moving quarter.

Regarding 2019, it can be seen that for the moving quarter January-March 2022, the Global Participation Rate needs to recover 6.2 percentage points and the Employment Rate needs 6.4 percentage points to return to its levels.

This may be due to the fact that they are people of pensionable age and face a difficult situation in reintegrating into the labor market.

In the 15 to 28 age bracket, the 44% Employment Rate has not yet recovered to the level before the pandemic, as it is around 4.7 percentage points short.

(See: The plan for older adults in search of guaranteeing them a decent life).

The Unemployment Rate for Youth for the January-March moving quarter it was 21.3%, that is, a decrease of 3.3 percentage points compared to the same period in 2021.

The youth unemployment rate tends to be higher than the national total. For this moving quarter, youth unemployment is 8.1 percentage points above the national Unemployment Rate, which stood at 13.2%.

In the first quarter, the informality rate, measured as pension contributions, was on average 57.4%. For Asofunds, The older population in the labor market has high rates of informality, above that observed for the national total even before the pandemic.

These high rates make evident the vulnerability and labor instability that Colombians face a few years after reaching pension age or entering old age.

The slight reduction could be due to the methodological change implied by the new framework of the household survey.

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