The Rudd government’s alarm about retiring Baby Boomers causing economic growth to fall is unfounded and its policy response — to bring in tens of thousands of overseas workers a year — is wrong because of the rapid rise in over-55s staying at work. According to a new report, a sustained increase in the labour force participation rate among men and women aged over 55 since the mid-1990s, continuing even as jobs are shed during the global economic downturn, should put a large question mark over the immigration program.

If immigration continues at current levels, the group most likely to suffer is young Australian jobseekers trying to enter the workforce, it concludes.

The report — to be published next week by Monash University’s Centre for Population and Urban Research in its People and Place quarterly — concludes that, even if the net overseas immigration intake were halved from its current 180,000 a year between now and 2018, the labour force would grow by nearly a million workers, about two-thirds of whom would be over 55. “The Immigration Minister’s fear that, without continued, unprecedented high levels of overseas migration, the Australian labour force will soon contract is unfounded,” the report concludes. “In the present economic environment of employment decline, sustained high levels of overseas migration are not necessary to ensure adequate labour force growth and such levels are compromising the employment prospects of younger job-seekers.”

The report’s author, CPUR social researcher Ernest Healy, told The Australian the Rudd government “appears to have been more alarmist than it needed to be in terms of population ageing and labour supply. “The assumption by the government has been that all these Baby Boomers are going to retire and there will be this crisis of labour growth, but they simply don’t seem to be retiring in the numbers the government has been expecting.”

Dr Healy said that, although the study did not examine the reasons why older workers were staying at work, he suspected easy access to finance over the past two decades might have increased household debt. And since the falls in superannuation balances because of the global financial crisis, the over 55s needed to work longer to have enough funds for retirement.

Employers, it seems, are generally happy to have them. “The participation rate among older workers has stayed up even after the crunch,” Dr Healy said. “They are hanging on to jobs across the occupational spectrum, including the skilled areas emphasised in migration programs.”

The report — Population Ageing and the Employment Surge among Older Australian Workers — shows that, even after the economic contraction started last year, employment growth had continued for older workers, while for those aged 15-24 unemployment deteriorated markedly. Almost all the growth for older men had been in full-time jobs, while for women, more of it was part-time.

“Nevertheless, the growth in the proportion of older employed women in full-time work is significant, having increased by eight and six points for women aged 55-59 and 60-64 respectively,” the report says. “This surge in the employment rate for persons age 55 and over is bad news from the point of view of the immediate prospects of young Australian jobseekers. At a time when the total number of jobs is shrinking, they face competition from both older persons and from the current record high migration intake.”