ACTIVE, HEALTHY AGEING AND SOLIDARITY BETWEEN GENERATIONS:
THE ROLE OF THE SOCIAL INSURANCES
ESIP CONFERENCE BRUSSELS, 23-5-12
Social inclusion of older people through active participation in society
Working beyond retirement:
explaining a UK phenomenon
Bernard H Casey
Institute for Employment Research
University of Warwick, UK
Working beyond retirement:
explaining a UK phenomenon
Outline of presentation
What has been happening
Why it has been happening
Is it “a good thing”?
Conclusions
What has been happening (1)
Employment rates of people 65+ (end 2011)
EU 27
EU 25
EU 15
Germany
Spain
France
Italy
Netherlands
Poland
Finland
Sweden
UK
all
4.9
4.7
4.7
4.9
2.1
2.2
3.3
5.9
5.0
4.7
6.4
8.6
men
7.1
6.9
6.9
6.8
2.7
3.1
5.9
9.1
7.9
7.2
9.1
11.5
women
3.3
3.0
3.0
3.4
1.6
1.6
1.3
3.2
3.2
3.0
4.2
6.2
What has been happening (2)
Growth of post-retirement age working (index: 1997=100)
170
over SPA actual
160
150
140
50-SPA actual
total
employment
50-SPA no change in
behaviour
130
120
110
100
90
1997
over SPA if no change in
behaviour
1998
1999
2000
2001
2002
2003
2004
2005
aged 16 and over
aged 50-SPA
50-SPA, conststant employment rate
aged SPA and over
SPA and over, constant employment rate
2006
2007
2008
What has been happening (3)
Employment rates by age during the crisis (Jan. 2008=100)
men over SPA, emp rate 12%
115
110
women over SPA, emp rate 13%
105
100
100
early retirement?
95
men 50-SPA, emp rate 71%
90
all 18-24, emp rate 58%
18-24 year olds all
50-SRA male
above SRA male
above SRA female
Note: female SPA rises by one month every two from April 2010
50-SRA female
2010 Nov
2010 Oct
2010 Sep
2010 Aug
2010 Jul
2010 Jun
2010 May
2010 Apr
2010 Mar
2010 Feb
2010 Jan
2009 Dec
2009 Nov
2009 Oct
2009 Sep
2009 Aug
2009 Jul
2009 Jun
2009 May
2009 Apr
2009 Mar
2009 Feb
2009 Jan
2008 Dec
2008 Nov
2008 Oct
2008 Sep
2008 Aug
2008 Jul
2008 Jun
2008 May
2008 Apr
2008 Mar
2008 Feb
2008 Jan
85
What has been happening (4)
%s
High incidence of non-standard working
100
90
80
70
60
50
40
30
20
10
0
all women
all men
18-24
25-49
50-SPA
men
women
Over SPA
What has been happening (5)
Type of non-standard job and whether “involuntary”
80
70
%s
60
50
40
30
20
10
0
men
women
part-time
temporary
women
men
self-employed
18-24
part-time
men
25-49
50-SPA
women
temporary
not obviously
“involuntary”
Over SPA
proportion (%) unable to find full-time/permanent job
18-24
25-49
50-under SPA
SPA and above
men
22
33
14
2
women
17
7
7
3
men
31
38
31
3
women
20
27
23
4
What has been happening (6)
Other aspects of post-SPA jobs
1)
Occupational segregation
-
2)
concentrated at top and esp. at bottom (inverted wine glass)
so lower paid
more pronounced for “job changers”
Not enough known about “transitions”
-
“job-stayers” more numerous than “job-changers”
self-employment as a way of “staying in”
little “unretirement” presumed
What has been happening (7)
Changing expectations of retirement
Expectations of still being in work at different ages
2002/3 2008/9
Expecting to be in work after age 60
Women aged 55-59
36%
48%
Men aged 55-59
56%
62%
Expecting to be in work after age 65
Men aged 60 to 64
26%
32%
source: ELSA (Crawford and Tetlow, 2010)
Why it has been happening (1)
Government policy
1) Pension reform
-
raising pension age (fiscal impetus)
removing default retirement age (age discrimination legislation)
2) “Building a society for all ages”
-
employment as a means of social inclusion
Employer policy
3) Post-SPA workers “the new flexible workforce”
-
explaining post-2008 performance
Why it has been happening (2)
Personal choices
4) Increased economic necessity
- pension values post the crisis
- “added worker” effect
5) Changing attitudes to work
- wanting/liking to continue – but evidence limited
Why it has been happening (3)
Why people work – the GLAS survey
Why people 60-79 work: UK 2006
reason for continuing
%
I want to
81
I feel I have to
19
Source: Oxford Institute of Ageing/HSBC Global Ageing Survey
Note: total in sub-sample (people who continue/intend to continue working) = 70
Is it “a good thing”? (1)
Maintaining labour supply (projections made 2006)
w
100%
90%
80%
m
post ret.
age
people
older
people
70%
w
60%
50%
40%
m
30%
w
20%
10%
m
0%
1990
under 25m
2005
under 25w
25-49m
25-49w
2020
50-64m
50-59w
65+m
60+w
prime
age
people
young
people
Is it “a good thing”? (2)
Maintaining pension system sustainability
Fiscal implications of raising the retirement age
Sensitivity of projections – increase or decrease in expenditure on public
pensions, expressed as % of GDP, EU27, 2060
Baseline
projection
Impact of …
total increase achieving
achieving
achieving
failure to enact
2007-2060 a
higher
higher
higher
existing reforms
employment
employment of effective age
reducing benefit
of all ages b
people 55-64 c of exit d *
levels e *
2.4
-0.1
-0.1
-1.8
2.1
*
Reference is to change 2008-2060 not 2007-2060.
Is it “a good thing”? (3)
…. whilst maintaining pension “adequacy”
The objective of the Green and White Papers
Impact of increase in age of entitlement to a pension
and cut in pension benefits producing equivalent fall in expenditure – EU27
expenditure falls by PPs of GDP
cut in pension (%) to produce
same result
2030
2060
2030
2060
age of
entitlem ent
increased by
1 year
0.7
5.9
2 years
1.3
1.3
11.7
10.0
3 years
2.0
1.8
17.3
14.8
4 years
2.4
19.4
Is it “a good thing”? (3)
Improving wellbeing
Comparison of wellbeing between workers
and non-workers
men 65+
women 60+
working not working working
not working
Quality of Life score
45.8
41.7
45.5
42.0
Life Satisfaction score
28.5
26.9
26.8
26.3
Suffering depression
6.5%
12.9%
11.2%
21.1%
source: ELSA (McMunn et al, 2009)
Is it “a good thing”? (4)
The impact of retirement on cognitive ability
Hypothetical relation between cognitive ability
and retirement age
Average cognition score and proportion not working –
men and women 60-64
Source: Rohwedder and Willis, 2010 JEP
Is it “a good thing”? (5)
Intergenerational conflict
1)
Attitudes of business associations
-
2)
“young people the future” – priority in the current crisis
The UK Supreme Court in Sheldon case (April 2012)
-
mandatory retirement might be justifiable
Popular views
3)
-
The Pinch: How the baby boomers took their children's future
– and why they should give it back
The case of Japan
4)
-
too much emphasis on older workers?
The “lump of labour fallacy”
5)
-
but “short run adjustment problems”
Conclusions
UK not peculiar
but one of most dramatic changes
Post-retirement-age working different
non-standard arrangements important
Benefits in many dimensions
achieving pension sustainability and adequacy
enhancing growth potential
improving wellbeing of older people
But unresolved questions
scope for intergenerational conflict
… and issues of health of people in late phase of
working life