Increasingly, people want to work longer. Due to improvements in health, they are able to do so. Across Europe, however, there has historically been a culture of earlier retirement, and older workers can feel unsupported. In light of this, the International Longevity Centre-UK (ILC-UK), with the support of Prudential, set out to investigate how we can extend working lives across the European Union (EU) and clarifies the role of EU institutions and member states in this. The culmination of this work was the recently published report, Working Longer: An EU Perspective, which was launched on September 3, 2013. UK Minister for Pensions Steve Webb, MP, spoke at the launch about the findings of the research and the policy context more broadly.
The case for extending working lives is compelling. The economic case for working longer is well established—for individuals who wish to supplement their retirement income as well as economies who wish to maintain participation in the labor market. The overriding reasons for this are the demographic changes that are forecast to take place in the coming years. It is no secret that the aging of the population in combination with low birth rates will come to pressure economic resources, and this is particularly the case in regard to labor dependency ratios among EU member states. The economic circumstances Europe now faces also require much broader employment participation across the life course—state revenues are under significant strain due to the economic crash and resultant austerity measures. By working longer and contributing more to the economy, older people have an important role to play in leading Europe out of its current economic malaise.
So the case is then clear, but what is the EU actually doing to support working longer? Although extending working lives has been a goal of European policy makers for more than a decade, the average rate of employment among those aged 55–64 was 48.8 percent in 2012. Clearly there is much to be done. A number of initiatives have attempted to improve on this outcome including targets set out by the European Council of Stockholm and as part of the Lisbon Strategy for Growth and Jobs. Working Longer: An EU Perspective identifies four channels through which European governance has supported the working-longer agenda at the European level. For example, while pension policy is primarily the remit of member states, EU institutions have sought to influence practice so as to encourage more sustainable pension systems; the European Commission White Paper, An Agenda for Adequate, Safe and Sustainable Pensions, sets out an agenda to improve pension adequacy. So we can see that the legislative foundations are in place.
Looking at EU employment law, legislation has been passed to help protect the rights of older workers. Article 21 of the EU Charter of Fundamental Rights protects citizens from discrimination on any grounds, including that of age. Furthermore, Council Directive 2000/78/EC required Member States to make illegal the unequal treatment of individuals in employment, recruitment, and training—on the basis of a number of characteristics, including age.
As part of this research, ILC-UK conducted a review of the relevant policy areas where work needs to be done, highlighting best practices from member states. The report outlines seven major themes on which EU institutions and member states must respond in order to meet the working-longer challenge: achieving gender equality; skilling up the older workforce; supporting older people in the recession; matching the demand and supply of older workers; tackling ageism; improving health; and recognizing the diversity of the workforce.
Taking the theme of “skilling up” the older workforce specifically, we can find an example of good practice in Bulgaria where the country’s Social Innovation in Enterprises scheme is working to incentivize businesses to retain older workers by asking older employees to conduct workplace training to pass on their knowledge; through awareness campaigns to promote the value of long-term training of workers; and by providing funds for workplace-based training schemes.
Resulting from the analysis, the report outlines five suggested policy areas that should be focused on by EU institutions and member states to facilitate extended working lives:
Taking a life course approach to working longer. This approach implies that member states should avoid any initiative that creates intergenerational unfairness in access to work and in practical terms, and includes flexible working schemes and support to people of all ages in take up learning opportunities.
Better use of fiscal incentives to support working longer. While increasing the state pension age is a useful lever to extending working lives, its overall impact is not categorical and member states should explore further incentives to keep older people in work, such as the UK’s national insurance tax exemption for working people over state pension age.
Creating more, better, and more appropriate jobs for older workers. The EU regional approach should support the creation of jobs for all ages, and member states should support a strategic approach inclusive of employers, employees, and trade unions should be brokered.
Tackling inequalities. There are substantially lower numbers of older women in the workforce compared to older men in the majority of EU countries. Tackling inequalities such as this is to be accomplished through multiple, simultaneous initiatives such as the promotion of lifelong learning, addressing health inequalities, and ensuring caregiving is not a barrier to employment.
Ensuring the research agenda contributed to extending working lives. An improved understanding of the motivations that lead to extended working lives is required, and member states should dedicate research resources to this inquiry. It is also important that the European Commission research agenda promotes “what works” in extending working lives.
This report is a timely and useful addition to the current debate around extending working lives and European economic policy more widely. We believe that older people would further appreciate more flexible options in their later working later lives, and the chance to retrain and work flexibly is important. The extent to which governments are willing to promote the agenda of older people’s working lives, and the extent to which media attention is fixated on jobs for the young, remains to be seen.
about the author
Trinley Walker joined the ILC-UK in March 2012. Prior to beginning with the ILC-UK, Trinley interned at The Hague Centre for Strategic Studies, in the Netherlands. In this post he conducted research on a range of policy issues, including urbanisation and the Dutch National Risk strategy. He has also previously worked at The Training and Development Agency for Schools as a Research Officer, where he assisted with the management of research projects investigating the pedagogic role of Teaching Assistants.
Trinley obtained his BA in Political Science from the University of Essex and went on to complete an MSC in Conflict Resolution and Governance at the University of Amsterdam, where his dissertation examined the role of a conflict narrative in a diaspora context. Trinley has a range of research interests and is particularly interested in intergenerational cohesion, quality of life provisions for older people and comparative societal approaches to ageing.