The multi-billion dollar price tag of workplace ageism
The financial consequences of ageism are starkly evident in the workforce. A study by AARP and the Economist Intelligence Unit found that in 2018, age discrimination cost the U.S. economy $850 billion in lost GDP. This staggering figure is attributed to several key factors, including involuntary retirement, longer periods of unemployment for older workers, lower earning potential, and lost productivity. Older workers forced out of their jobs often face significant hurdles finding new employment, accepting lower wages, or leaving the labor force entirely. If this trend continues unchecked, the economic loss could balloon to a projected $3.9 trillion by 2050.
Lost productivity and skills
By pushing experienced workers out of the labor market, ageism robs companies and the economy of valuable skills, institutional knowledge, and mentorship potential. Multi-generational workplaces, on the other hand, are shown to be more productive, resilient, and innovative. The bias against hiring older workers or investing in their training perpetuates a cycle of lost potential. This affects not only the workers directly, but also the sectors that rely on their expertise, with finance, trade, and professional services being particularly impacted.
The high cost of ageism in healthcare
Ageism's impact extends far beyond the workplace, significantly raising healthcare costs. A landmark 2018 Yale study estimated that ageism led to an excess of $63 billion annually in healthcare expenditures for people over 60 in the United States. This cost is not merely a reflection of age but a consequence of ageist attitudes and practices within the healthcare system.
How ageism affects healthcare outcomes
Ageism in healthcare manifests in several ways, including:
- Negative stereotypes held by healthcare providers.
- Exclusion or underrepresentation of older adults in clinical trials.
- Treatment plans that fail to follow standard medical guidelines for older patients.
- Negative self-perceptions of aging, which can create stress and worsen health outcomes.
These factors lead to poorer health outcomes, avoidable morbidity, and costly, preventable adverse events. When older adults are misdiagnosed or receive suboptimal care due to age-related biases, their conditions can escalate, requiring more intensive and expensive treatments later on.
Ripple effects: how ageism impacts the broader economy
The effects of ageism cascade throughout the economy, creating a web of indirect costs. Lost wages and involuntary retirement reduce older Americans' spending power, affecting industries that rely on consumer demand, such as healthcare and leisure. Ageism also influences long-term financial security, forcing many to adjust retirement plans or face financial hardship.
Economic impacts by sector
| Economic Sector | Impact of Ageism |
|---|---|
| Workforce/Employment | Reduced GDP ($850B+ annually), lost productivity, earlier retirement, longer unemployment for older workers. |
| Healthcare | $63B in excess annual costs for older adults, poorer health outcomes, preventable adverse events. |
| Consumer Spending | Decreased purchasing power from reduced wages and retirement savings, affecting leisure and retail industries. |
| Social Security & Medicare | Increased strain on social safety nets as older workers are pushed out of the workforce prematurely. |
| Innovation | Lost potential for innovation and mentorship by excluding the skills and experience of older workers. |
The human toll: beyond the financial cost
While the financial figures are staggering, the human cost of ageism is immeasurable. Experiencing age discrimination can have serious emotional and psychological impacts, including increased stress, anxiety, and feelings of isolation or loneliness. These negative experiences can directly contribute to worsening physical and mental health, creating a vicious cycle of prejudice and poor well-being. Research shows that negative perceptions of aging can have a direct negative effect on physical and mental health, contributing to the very health problems that fuel higher healthcare costs.
Strategies for reducing the costs of ageism
Fortunately, ageism is not an unchangeable reality. The World Health Organization and other international bodies have called for concerted action to combat ageist attitudes and practices through:
- Policy and legal reforms: Enacting and enforcing laws that protect against age discrimination in employment, housing, and healthcare.
- Educational activities: Implementing programs to increase empathy and dispel common misconceptions about aging and older adults.
- Inter-generational activities: Creating opportunities for connection between different generations to reduce prejudice and foster mutual respect.
- Improved data collection: Acknowledging the need for more research to better understand and quantify the impact of ageism, particularly in low- and middle-income countries.
Workplace initiatives can include blind resume screening, training for managers on unconscious bias, and mentorship programs that pair experienced and younger employees to foster mutual learning. Addressing the biases that exist within healthcare systems through training and policy changes is also critical for improving health equity and reducing excess costs.
Conclusion
The question of how much does ageism cost reveals a significant financial burden on society, costing billions annually in healthcare expenditures and lost economic potential. These figures highlight the urgent need to challenge age-based prejudices, not only for the dignity and well-being of individuals but for the health of our economy as a whole. By investing in policies and practices that promote healthy, age-inclusive environments, we can unlock immense human potential and create a more equitable, prosperous future for all. For more information on the economic impact of age discrimination, see the AARP Public Policy Institute's reports: AARP Public Policy Institute.
