EUROPEAN PAPERS ON THE NEW WELFARE

Mobilising the Potential of Active Ageing and Silver Economy in European Countries

1. Labour market participation of older workers
1.1 Employment rate by age groups
The comparative evidence presented here on the labour market participation of workers of different age groups is estimated from the European Labour Force Survey (LFS), and drawn from Zaidi and Zolyomi (2011). As shown in Figure 1, on average, only around 46% of those in the age group 55-64 were employed in 2010 and in some of Central and Eastern European countries this proportion is significantly lower (e.g. the employment rate for this age group of older workers in Poland, Hungary and Slovenia hovers around only 35%). Note also that in many countries these employment rates are far below the 2001 Stockholm target in which EU member States aimed towards ensuring that half of those in the age group 55-64 will be employed by 2010. Still, employment rates for those aged 55-64 did increase over the past decade, particularly for women, but the employment growth for this subgroup has been halted by the crisis.

Figure 1: Employment rate by age groups (%), 2010
zaidi-fig1
Source: Labour Force Survey 2010

The cross-national differences in the employment rate for the age group 65-74 (the so-called silver workers) is of special interest as it points to institutional contexts in which a longer engagement with the labour market of older workers is encouraged (Eurofound 2012). Such a formal engagement after retirement also serves as a possible means to remain actively included in other social and civic engagements (Giarini 2009). Results presented in Figure 2 also show that the propensity for the 65-74 age group to be employed is highest in Portugal and Romania: around 22% of workers in this age group are employed, although these workers are mostly employed in agriculture and in subsistence farming. Cyprus and Estonia are other countries with high propensity of employment for this age group – around 16%. This may be because of inadequate levels of pension income entitlements and social welfare payments and thus employment in late ages is a means to additional income after retirement. Denmark and Sweden and (possibly) Ireland and the UK, which also report relatively high employment rate for workers aged 65-74, point to contexts in which bonus incentives in the public pension system to delay retirement are high and there are clear improvements in the work environment for older workers.

1.2 Gender differences
Are these patterns different between men and women? Results for women across age groups are presented in Figure 3. These results show that the employment rate for women is lower in all age groups, particularly in older age groups – on average, only around 39% of all women were in employment in 2010. As is shown in Figure 2, the employment rates for younger age groups of women (25-54) hover around 70% (on average), but the employment rate for older female workers (age group 55-64) is low in many countries. This percentage is remarkably low in Malta (13%), but also in Poland (24%), Slovenia (25%) and Italy (26%).

Figure 2: Employment rate of women by age groups (%), 2010
zaidi-fig2
Source: Labour Force Survey 2010

Latvia and Estonia are the only two countries where women are more likely to be employed than men in the age group 55-64. The three Nordic EU countries, as well as the UK, also do not show significantly different employment rates among men and women in the same age group. Where employment rate is higher in the age group 65-74, it is mainly because of the male participation; for example, in Italy and Malta the employment rate for men aged 65-74 is more than three-times as high as it is observed for women.

Figure 3 shows the year-on-year differences for older persons’ work participation between 2005 and 2010, and it shows a rising trend during this time, although this trend has been either halted (for men) or slowed down (for women) due to the recession in 2008. For both men and women of age 55-64, employment recorded a 3 percentage point (p.p.) increase between 2005 and 2008. The rising trend for women in this age group continued beyond 2008 but it stagnated for men. The employment rate among the so-called silver workers, aged 65-74, is much lower, but there has also been a rising trend during the period 2005-2008 and a stagnation during 2008-2010.

Across many EU countries, the rising trend of employment among male workers of age 55-64 (during the period 2005-2008) was halted, slowed down or reversed due to the recession that started late in 2008 (for detailed results, see Table B.5, Annex B, in Zaidi and Zolyomi 2011). For example, in Austria, the employment rate for men in this age group recorded a remarkable rise of 10 p.p. during 2005-2008 and no significant change was observed in the subsequent two years. In Bulgaria, older male workers of this age group experienced a similar rise as in Austria during the period 2005-2008, but then experienced a contraction of -5 p.p. during 2008-2010. In Germany, the growth in employment for this group during 2005-2008 has been an impressive +8 p.p., and it slowed down considerably during the following two years (to almost +4 p.p.). Latvia offers the most staggering reversal of the trend: from a change in p.p. that is almost similar to that of Germany during the period 2005-2008 (+8 p.p.), it moved to a contraction of -15.5 p.p., which took the employment rate among this group to even lower than that observed in 2005. Bulgaria and Lithuania also show similar reversal of fortunes for older male workers after 2008.

Figure 3: Trends in the employment rate, workers aged 55-64 and 65-74, by gender, EU27 average
zaidi-fig3
Source: Labour Force Survey 2005-2010

The trend observed on average in EU27 for older female workers aged 55-64 is also observed in the majority of countries: there was a rising trend of employment during 2005-2008 and it slowed down afterwards due to the recession in 2008 (see Table B.5, Annex B, in Zaidi and Zolyomi 2011). The impact of the recession is clearly less for older female workers than that observed for older male workers of this age group. There are also some exceptional results: In Slovenia and Poland, the female employment picked up even more after the recession, and in Denmark there is reversal from a contraction in employment of female older workers during 2005-2008 to a growth in the employment rate for this age group during 2008-2010.

1.3 European countries approaches in promoting labour market activity of older workers

Currently the Social Protection Committee (SPC) and the ministries responsible for social policy at the national level are focusing on the Europe 2020 agenda. As mentioned above, active involvement of people 50+ is one of the key priorities for the programme on active ageing and social inclusion in this context.

The comparative policy experiences across European countries show that there are in effect two broad types of measures:

  1. Promotion of the employment of older people, through financial incentives for work in the pensions and social old-age benefit systems and through phasing out early retirement schemes, and by raising retirement ages (in some case abolishing the default retirement age, such as in the UK);
  2. Improvement of work conditions for the recruitment, retention and productivity of older workers. This involves effective age management policies at the company level; public measures for the improvement and modification of qualifications and competences (especially for people over 45); reductions in labour costs of employment of older workers and effective labour market activation programmes, with the effective involvement of public institutions, such as Public Employment Services.

Many countries have been able to successfully implement the first type of policy measures during late 1990s and early 2000s, and have now been embarking on complementing them with the second type of measures. A good example is indeed Poland, which (after successful pension reforms) has now prepared a comprehensive programme, (called ‘Solidarity across generations. Measures aiming at increasing the economic activity of people over 50’), of measures directed at increasing the employment of people over 50. The main goal of the programme is to achieve the employment rate target of 50% for people aged 55-64 set by the Lisbon Strategy by 2020. The detailed goals for this programme provide a good picture of comprehensiveness of the programme design (whose implementation is currently being negotiated) – for details see the synthesis report of the Peer Review Seminar.

To avoid repetition, and for the sake of brevity, readers are referred to the summary section of the European Employment Observatory Review ‘Employment Policies to Promote Active Ageing 2012’ (European Commission 2012)1 . The full report provides the most comprehensive review of diverse strategies followed in European countries to promote the labour market participation of older workers. As emphasised in the best practice example of Poland above, and also in the introduction part of the discussion paper, the single message coming from the EEO Review is: the measures such as raising the statutory retirement age, phasing out early retirement schemes and introducing financial incentives into pension systems are important and already used in many EU Member States, but the issue needed to be addressed more comprehensively by putting focus on the supply and use of lifelong learning opportunities by older people, and making workplaces and markets age-friendly. The reconciliation of work and family life strategy also stands out in many countries.

2. Social participation of older people
The analyses undertaken above show that less than half of older workers in EU countries in the age group 55-64 are in employment. It is obvious that the rest are not idle, especially given the fact that the longevity gains of the recent past have accompanied gains in the healthy life expectancy. Across many European countries, the recent retirees have become more active, especially those who have taken early retirement. Most are involved in other social activities – for example, a 60-year old woman outside the labour force is in many instances a child-minder for her grandchildren, nurse to her ageing mother and at the same time she will cook for her husband. These women put in more hours of activity than those who choose to stay in the labour market.

It is important therefore to measure the social non-market contributions of older people in the society, through (for example) their involvement in volunteerism, in providing care to their own children and grandchildren and to adult members of their families. Also, it is crucial to highlight measures that can be introduced to promote the recognition of such social contributions in seeking greater solidarity between generations. This is the subject matter of this section, and covers social non-market productive activities of older persons aged 55 or more, with respect to volunteerism, care services to their own children and grand-children and care provision to older adults, drawing from the indicators constructed using data from the European Quality of Life Survey in the context of the active ageing index project for the EU countries (for more details, see European Centre Vienna 2013; Zaidi et al. 2013).


1. www.eu-employment-observatory.net/resources/reviews/EEOReview-ActiveAgeing-2012-published.pdf


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