Pensions minister Steve Webb has urged employers to take advantage of the vital and untapped potential older people could bring to the workforce.
There are expected to be 13.5 million job vacancies created over the next decade, but only seven million young people are expected to leave school and college over that time to fill those posts.
Webb this week said older people could fill this shortage and also give firms a competitive advantage. 'Older people are the main untapped source of labour in this country,' he said on Monday.
'Britain is in a global economic race and we're moving towards a landscape where there will be a set of jobs that employers cannot fill with anyone but experienced older workers. A firm that doesn't make use of the talent pool on offer amongst the over 50s will be left behind.'
Over 50s form 27% of the current workforce but this is expected to increase to a third by 2020 as fewer younger people join the world of work and people live and keep fit for longer. According to Chartered Institute for Personnel and Development figures, half of workers aged over 55 are proposing to work past the state pension age, while the default retirement age was abolished in 2011.
Despite this, the over-50s are still the least likely age group to be recruited, the Department for Work and Pensions said.
Webb explained: 'We're certainly not suggesting older workers take jobs away from younger people, nor that people should be continuing working into their 70s.
'Instead, we're saying it's time businesses allow people to fulfil their professional potentials and that employers heed to the competitive edge older workers bring to their businesses.'
Among the suggestions the government made this week in a new guide on employing older workers is offering apprenticeships and work experience placements to people of all ages.
Analysis published today by economists at the Institute for Fiscal Studies directly attributes the increasing employment rate among older women to the raising of the state pension age for women, This began in 2010 and will continue until it reaches parity with men at 65 in 2018.
The proportion of 60- to 64-year-old women in work rose from 25.6% in 2000 to 34.1% in 2010 but then increased by a further 2.2%, to 36.3%, in less than three years. According to the IFS, 85% of this increase can be attributed to the hike in women's state pension age.