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This chapter examines issues resulting from an ageing population and an ageing workforce. As a result of large increases in the ratio of older economically inactive persons per worker, two main challenges have emerged: the need to reallocate human resources across
sectors and institutions and the need to increase productivity due to the fiscal pressures created by an ageing population. There are specific challenges within the public service, where workforces are ageing more rapidly. These present opportunities in the management of
public services. Although an ageing public service increases the fiscal burden while also decreasing the public service capacity, in the long run it represents a strategic opportunity to downsize the public sector workforce where needed, to make structural changes to the
conditions of employment, introducing greater flexibility, and to reallocate human resources across sectors to meet the increased needs in social and long‐term care services for the elderly.