Tag Archives: Career

Reform and retirement: pension lessons from Finland

Pension reform is taking place in countries around the world. Governments, businesses and individuals have gradually come to terms with the fact that one of the consequences of us all living longer is that existing pension arrangements are unsustainable. As a result, millions of workers are being encouraged, nudged or, in some cases, forced to work longer. But what if reforms don’t work or have a different impact from that intended? Tarani Chandola from the ESRC International Centre for Lifecourse Studies and University of Manchester has been analysing the complex interplay between pension reform and our health and their combined effect on the timing of retirement.

We all need to work longer and retire later! Those are the essential messages coming from Governments around the globe. Turning those messages into concrete change that can make pension systems sustainable, however, is no straightforward matter, especially when you take into account the health problems that older workers can face.

The combined impact of pension age policies and our health on our decision to retire and the complex way those things play out are not very well understood. Many people stop workingbecause or ill health or caring responsibilities. Changes in the age when people can claim their state pension, which is increasing in the UK, could deter people from retiring when they perceive they need or want to.

Our research took a close look at pension reforms introduced in Finland in 2005, where, in place of a fixed statutory retirement age of 65, workers were given the choice of retiring between the ages of 63-68. The central goal of the reform was to ensure the sustainability of the pension system and to promote longer working lives. To try to get more people retiring at the top end of that age range, financial incentives were introduced for those who opted to retire later.

We looked at people who retired before and after the reforms to see whether the changes to the system had the desired effect of getting people to work longer. We also wanted to see if people who opted for early retirement (between the ages of 63-64) tended to be in better or poorer health.

Health issues linked to retirement

Our research made use of information from the medical and retirement records of more than 20,000 men and women born over a 9 year period. As far as their health was concerned, we focused on issues most closely linked with retirement such as circulatory disease and bone and muscular problems like arthritis as well as mental health problems. We were also able to access records of the sorts and quantities of prescription medicines that people were taking in the run up to retirement.

Looking at the pre-reform group, there was a clear decreasing trend in retirement by age 63 and by age 64. Among the post-reform group, there was no clear trend, but each birth cohort was substantially more likely to have retired by the age of 64 than those in the pre-reform cohorts. In fact, workers subject to the new system were 50% more likely to retire age 63-64 than those in the old.

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Although retirement was generally more common among people with poorer health, as we thought would be the case, it was striking that the increased numbers of people retiring early in the post reform group tended to have better health.

In short, the reform encouraged more people to retire earlier. Those in poor health were just as likely as before to retire early, but among people with better circulatory, muscular, bone and mental health, retirement at 63-64 increased substantially. Even when we took a range of other factors into account, such as their social and economic circumstances and their education, their good health was a strong predictor of retirement.

Unintended consequences

A more flexible retirement age, in Finland’s case, has had the unintended consequence of encouraging more, not less people into early retirement. Many of those were people in good health, the sorts of workers who might have several healthy working years ahead of them – the sorts of people the Finnish Government would have hoped would retire later.

Further reform is already on the cards for Finland in 2017 and is likely to see the lower age of statutory retirement raised to 65 and after that linked to life expectancy.

Here in the UK, we have seen the raising of the State Pension Age to 67 for men and 65 for women with further changes slated for the future. Only time will tell if it has the desired effect of keeping people who otherwise might have retired earlier in work or whether other factors, such as an individual’s health will play a stronger role in those decisions.

Our study shows that, regardless of what is happening with pension reform and policy, those in poorer health are unlikely to be able to extend their working lives no matter what, something Governments everywhere need to build into their thinking about pension reform.

Further information

Health as a predictor of early retirement before and after introduction of a flexible statutory pension age in Finland is research by Taina Leinonen, Mikko Laaksonen, Tarani Chandola and Pekka Martikainen

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Who works post State Pension Age?

Across Europe and indeed other parts of the world, we’re being told we need to work longer than in the past. The reason? We’re all living longer and pension systems everywhere are collapsing under the strain. But with age can come poorer health and reduced physical capabilities and what if doing our job is physically or mentally demanding? Raising the State Pension Age for this group of workers compared say with someone working in a less stressful job could end up creating pressure on specific disadvantaged groups, whilst favouring already advantaged groups. Morten Wahrendorf from the University of Dusseldorf and ESRC International Centre for Lifecourse Studies has been investigating.

A number of Governments across Europe have already increased the state pension age beyond 65 and are actively looking to introduce incentives and measures that they hope will get more people of working age to retire later.

Quite a lot of research has looked at what things are going on in people’s lives that might lead them to retire early from work, but far fewer questions have been asked about what might lead to someone working beyond state pension age. What sorts of jobs do they tend to do? What are their working conditions like? How do those compare with people who retire earlier?

It’s important to get a grasp of this if we are to ensure that any changes made to the pension system are fair and just and that they don’t adversely affect specific or already disadvantaged groups.

Using information on nearly 18,000 men and women aged 65 and over from 16 European countries we were able to look into this in some depth and effectively compare prior working conditions of those people who retired early with current conditions of those who worked longer.

Work and conditions

Our information came from the Survey of Health, Ageing and Retirement in Europe (SHARE). We looked at whether the participants were employed or not, their job (at the time of the survey and immediately before retiring), how long they had been doing their job, working hours and how stressful their job was.

In addition we looked at what the participants said about how much freedom they had at work, whether there were opportunities to develop new skills, whether their job was physically demanding or time-pressured and how supported and recognised they felt at work.

As far as survey participants’ health was concerned, we were able to see how they rated their own health, whether they were depressed, their quality of life, and how mentally and physically capable they were.

Workers better-off and better-educated

Of everyone we looked at in the study, 755 (4.3 per cent) were still working between the ages of 65 and 80. They tended, on average, to be better off and better-educated than those who had retired.

Those still working were three times as likely to be self-employed as our retired group, who were also less likely to have been in a managerial or professional job before retiring.

Those who had retired reported higher levels of stress in their last job, particularly when it came to how valued and supported they felt. They also had poorer health across the board on all the measures we looked at.

Figure 1. Prevalence of poor health by labour market situation among older men and women (aged 65 to 80 years) in percentage (n=17625

ICLS-health

These findings were still seen even after accounting for a host of other factors including their sex, education, whether or not they were in a relationship, if they had children and how well off they were, and also country affiliation.

There is robust evidence here that across Europe people who are likely to work longer are those who are self-employed or in a good job where they are in control and feel well supported and valued. They are also in better physical and mental shape than their retired counterparts.

Raising the State Pension Age or offering tax incentives to people to work longer may well favour certain groups who are already doing better than their peers in a number of ways. It could also place increased pressure on people already in poor health and in poor quality jobs.

All this needs to be taken into account by Governments looking to plug the pensions gap and by employers who will need to provide good jobs in a better, less stressful working environment if their workers are to remain productive post 65.

Further information

Photo credit: Fish, nico_enders

Empower employees! They will retire later

Working longer has become a policy priority in recent years, but how can people be actively encouraged to retire later? What needs to change in the workplace in order to persuade people to extend their working life? UCL’s Ewan Carr, as part of the renEWL project, has been looking at survey information from the English Longitudinal Study of Ageing (ELSA) to see what matters to older workers when it comes to deciding whether or not to retire.

Rates of employment among older workers (aged 50-64) may have increased in the last decade or so, but across Europe, significant numbers of people in this age group continue to retire before the statutory pension age. In fact, more people retire before statutory pension age than after it.

For policymakers seeking to change that position, and for businesses looking for how best to modify the workplace to help achieve it, a better understanding of the drivers behind early retirement is essential.

Job demands and conditions

We looked at the working lives of nearly 3500 members of the ELSA study to see whether the demands and conditions of their job influenced the preferred and actual timing of their retirement. We focused on the mental as well as the physical demands of their job.

We anticipated that those with physically and mentally demanding jobs would prefer and, where possible, opt for early retirement, whilst those with fulfilling jobs, with decision making powers, support and recognition, good career opportunities and financial reward would be happy to work longer.

Participants in the study were asked how physically demanding their job was, how much time pressure they were under at work, how much control they had and to what extent they felt supported and recognised.

After taking a range of factors into account, the mental demands of a job, control at work and low recognition were the most influential when it came to retirement timing preferences.

Retirement preferences

We found that employees who reported having to ‘work very fast’ or being under time pressure preferred to retire 3 months earlier than those who said this was not the case. Employees who reported having low levels of control at work and low recognition wanted to retire around 5 months sooner than their peers.

The likelihood of actually stopping work (as opposed to wanting to stop work) was also influenced by levels of decision control, support and recognition. Employees with high levels of control were less likely to stop working, compared to those with low levels of control. Employees who felt poorly supported or that their work wasn’t recognised were also more likely to give up work.

It seems that even though a mentally demanding job might lead someone to say they would like to retire early, this doesn’t always lead to them leaving work. Other factors, besides the workplace environment, may prevent older workers from retiring when they want to.

Those who want to keep working might end up retiring early due to poor health or caring responsibilities. On the other hand, employees who want to retire early (due to the demands of work) might lack the necessary pension or financial savings to make this possible.

Our findings indicate that increasing job control from low to high could postpone retirement preferences by as much as two years – a clear indication that modifying the workplace could and should be a focus for policymakers and businesses aiming to extend working life.

Working conditions as predictors of retirement intentions and exit from paid employment: a 10-year follow-up of the English Longitudinal Study of Ageing is research by Ewan Carr, Gareth Hagger-Johnson, Jenny Head, Nicola Shelton, Mai Stafford, Stephen Stansfield and Paola Zaninotto. It is published in the European Journal of Ageing

Photo credit:  Hiroyuki Takeda

Out of work again? The psychological impacts of repeated unemployment

Being unemployed is bad for our mental well-being, but if we lose our job more than once does the psychological blow lessen in some way? Researchers Cara Booker from the University of Essex and Amanda Sacker at the International Centre for Lifecourse Studies at UCL used the long-running British Household Panel Survey to examine the psychological well-being of people who have repeatedly lost their jobs. Their findings show that our employment history makes a difference and could have implications for welfare to work initiatives from Governments looking to get people back to work.

Continuous employment may be what is best for us, but of course life is not always that straightforward and, at any given time, a significant proportion of the population will be out of work. This could be because we choose to take time out to undertake training or to have a family. We may fall ill or be made redundant.

The world of work is also becoming more flexible. Fewer people are staying with the same firm for long periods of time and more people are moving from contract to contract or job to job, sometimes with spells of unemployment in between.

At the same time, the Government wants to get more people off benefits and into work and is looking to make its Work Programme more effective.

Using 17 years of data collected from the participants in the British Household Panel Survey (1991-2008), we looked at any individual who had reported at least one spell of unemployment. Of these 1,642 participants, 82 per cent were unemployed once, 15 per cent twice and 3 per cent three or more times.

Mental health score

Participants were asked a range of questions about their mental health and answers to these were used to allot a score with 0-11 indicating good psychological health and 12 or more indicating stress or anxiety that could lead to ill health. The time periods before and after a spell of unemployment were also taken into account because job loss isn’t generally something that happens suddenly and there can be weeks or months building up to it.

Looking at the group as a whole, we found their psychological well-being was generally poorer during all spells of unemployment compared with when they were not unemployed, but there was no evidence of a lowering or increasing of the effect from one spell of unemployment to the next.

When we dug deeper into participants’ prior work history, however, we saw some differences between those people who had previously been ‘economically inactive’ (voluntarily not working e.g. to look after family or study) and those who had been working.

Those who prior to being employed had been ‘voluntarily’ not working suffered poorer psychological well-being after they went on to lose their job but became notably worse in the third spell of unemployment.

The previously employed group’s psychological well-being also took a knock after losing a job once and then again, but, by the third time there was no change, a possible indication that the individual is somehow adapting or getting used to dealing with the ‘shock’ of becoming unemployed.

When we compared levels of psychological well-being between these two groups, they were notably lower among the previously employed at unemployment spells one and two, but this was reversed at spell three.

Employment history matters

So only when we took into consideration being economically inactive as opposed to employed, did a slightly clearer picture emerge around this question of whether people adapt to the ‘shock’ of unemployment, with those previously employed seeming to adapt and those previously economically inactive becoming increasingly sensitive to it. These findings were given further weight when we looked at retrospective employment histories before the BHPS began.

One explanation for this is that those who come from an employed background tend to find work again after each unemployment spell they experience, so they become less anxious about finding another job. The economically inactive, meanwhile, seem to find it harder to enter and re-enter the job market which could account for increased anxiety with more attempts to sign up as ‘unemployed and seeking work’.

Household income also played a role with those who were economically inactive on higher than average incomes experiencing worse psychological well-being than their less off counterparts when making an unsuccessful attempt to enter employment.

In its recent Welfare-to-Work report, the Work and Pensions Committee pointed out that key to the programme’s success was providing unemployed people with “the right help at the right time” and a better understanding of the barriers and characteristics that prevent a swift return to work. A better understanding of the impacts of repeated spells of unemployment on people’s well-being would seem to resonate here.

It is also clear that good quality, secure employment opportunities with long term prospects are key to people’s health and happiness.

Psychological well-being and reactions to multiple unemployment events: adaptation or sensitisation? is research by Cara Booker and Amanda Sacker and is publishes in the Journal of Epidemiology and Community Health

Photo credit: Kathryn Decker

 

Having a baby early? It might not be good for you later

Being employed is generally good for your health. That’s what a large body of research has shown over the years. But what about when you put having a family into the mix? That’s a question that Dr Anne McMunn at the ESRC International Centre for Lifecourse Studies at UCL has been asking in a series of studies looking at the interplay between work-family life and health in middle age. Here she outlines her findings and explains why having children early may not be good for you.

When couples think about starting a family, they may make decisions around a host of concerns. Finances, careers, childcare all spring readily to mind as things that could crop up in discussions about when it might be best to have a child. Not many people will stop and think about how and when having a child might affect their health later on in life – but maybe they should.

Research to date has shown that combining paid work with family responsibilities is usually linked with better health outcomes, although existing research has a number of shortcomings: men are often excluded, health measures have tended to be self-reported rather than objective, few studies take account of the role health plays in whether or not people work, get married and have children in the first place, and, crucially, few studies look across the lifecourse at the timings of entry into parenthood.

Combining work and family life

Using the National Child Development Study, which is following the lives of 17 thousand people born in 1958, our research has looked at how they combined their work and family lives between the ages of 16 and 42 and what that meant for their health in their mid 40s.

The thinking behind the research was that those people with more stressful work-family lives (often characterised by having children very young, being unemployed, and not marrying or forming a long-term partnership) would go on to have physical signs or indicators of poor health such as high cholesterol and blood pressure, being overweight etc.

All the men and women in the study were ascribed one of 12 lifecourse types e.g. ‘Work, Later family’, ‘Later family, Work break’, ‘Teen parent’.

Table 1-1

Almost all men were in a group characterised by long-term full-time employment, with most (34%) entering family life later (the ‘Work, Later family’ group), with nearly as many entering family life earlier (the ‘Work, Earlier family’ group at 32%). Conversely fewer than half of women (47%) were in a group characterised by long-term full-time employment. The ‘Part-time work, Earlier Family’ was the most common group (18%) for women.

Similar proportions of men and women were in the ‘Work, Cohabitation, Later Parent’ group (7% and 5%, respectively), the ‘Work, Marriage, Non-Parent’ group (8% of men, 9% of women) and the ‘Work, No Family’ group (13% of men, 10% of women). Only 4% of women were in the ‘No Paid Work, Earlier Family’ group, and few men or women were in groups characterised by marital dissolution, teen parenthood or weak ties to work or family.

Early parenthood – poorer health

As we expected, those men and women who were in full-time long-term employment, were married and had children later on enjoyed better health. Early parenthood, especially teen parenthood was clearly linked to poorer health, regardless of whether they were in paid work or in a stable long-term marriage.

For example, the waist circumference of teen parents was four inches larger, on average, than those who were in full-time long-term employment, were married and had children later (fat accumulated around the waistline is known to be particularly risky for health). Groups who entered parenthood earlier had 10-18% more fat circulating in the blood and 2-8% less of the ‘good’ HDL cholesterol than those who were in full-time long-term employment, were married and had children later.

Teen parents tended to be less well educated, which accounted for some of the link. However, even those who had stable employment and marriages, but had children early, had poorer health.

It seems that for both men and women, having children early is linked with poor health later on, possibly as a result of chronic stress from parenting in straitened circumstances with fewer financial and emotional resources.

Less human and social capital

Authors of other studies showing links between early parenthood and health problems such as depression, heart disease and long term illnesses, speculate that younger parents have accumulated less human and social capital to cope with the stresses of parenting. It is also possible that those who are older when they become parents have had time to establish healthier behaviours such as exercise and healthy eating prior to starting their families, making it easier to maintain those behaviours through the busy parenting years.

There is need for further evidence on how timing of parenthood influences health and we are currently replicating this study with participants from the 1970 birth cohort.

In the meantime, perhaps those family planning discussions around finances, careers and childcare should incorporate an extra question? If we have a child now rather than later, how might it affect our health later on? It’s a question that will be of interest not just to prospective parents, but to all those concerned with improving the long term health and well-being of our society.

Work-family life courses and metabolic markers in mid-life: evidence from the British National Child Development Study is research by Anne McMunn, Rebecca E Lacey, Meena Kumari, Diana Worts, Peggy McDonough and Amanda Sacker.

Photo credit: Darren Johnson

 

A question of inflammation

Inflammation can be good and bad for us. Find out more in this presentation from researcher Rebecca Lacey, who uses inflammatory markers in mid life to look at whether the way in which we combine our work and family lives early on affects our health later on.

The research,  presented at an ESRC International Centre for Lifecourse Studies policy seminar, concludes that homemakers and people who have children early, particularly teen parents, are at greater risk of poor health in mid life and recommends increased support and opportunities for young parents.

Listen to Rebecca’s presentation and view the slides below.

Work, family and health – a question of inflammation? from Chris Garrington on Vimeo.

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