November 23, 2021
Generational dynamics of economic crisis and recovery: Prospects for younger and older persons
Economic shocks affect young and older age groups disproportionately and highlight the insecurity of the youth labor market and volatility of older people’s savings. The COVID-19 pandemic exacerbated youth labor market challenges and caused young people to either lose jobs or work fewer hours. It also undermined the financial security of older people who tend to own small businesses given that half of the small businesses either closed down or lost significant revenue during lockdowns. Furthermore, COVID-19 exacerbated the digital divide between generations. While younger people are more likely to be technologically savvy, older generations often lack digital literacy to adapt to online work or virtual communications platforms. Dr. Goldin argues that to alleviate the disproportionate suffering experienced by young and elderly age groups during the pandemic, policymakers should increase targeting of social-protection measures, facilitate private-sector investment in education and training, invest in improving digital services and infrastructure, ensure access to financial services, and collect age-disaggregated data on economic and COVID-related indicators.
Although low-, middle- and high-income countries all introduced direct payments, food assistance, and other types of social protection programs, they targeted all age categories equally, without factoring in the heavier toll the pandemic had on young and elderly citizens. These two age groups also lacked access to government demand-side relief through the private sector. Measures to improve digital infrastructure and implement digital skills training programs have proven more successful.
Moving forward, the targeting of policy interventions should ensure that young and elderly age groups benefit from social protection measures. Policymakers should incentivize the private sector to invest in the training and reskilling of its own employees and to participate in systems preparing future workers. They should also make general and targeted interventions to improve digital affordability and access for young people and computer literacy for the elderly.
Another area of improvement is access to financial services and credit, which can be useful for older people who are more likely to be owning small businesses. Targeted programs can also help young people who might be less knowledgeable about special lending relief. Finally, it is important to increase rigorous research and make available age-disaggregated data on economic and COVID-related indicators.
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