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
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.
Photo credit: Fish, nico_enders