With increasing life expectancy and decreasing fertility rates across Europe, there are concerns that the financial sustainability of pensions systems, as well as health and social care, are in jeopardy. In short, a growing number of older people are receiving pension and health and care provision. In reaction policy makers have implemented several reforms aimed at delaying retirement and extending working lives, including increasing state pension ages, reducing pension amounts, closing early retirement pathways (or making them financially less attractive), and investing in older workers’ employability. Although the effectiveness of these reforms is debatable they seem to have had some impact as older workers’ employment rates are increasing, as shown in Figure 1.
Figure 1: Employment rate of older workers in five European Countries included in the EXTEND project for women (F) and men (M)
This development is generally very positive economically as later retirement ages and higher employment rates mean lower pension costs and higher contributions as well as taxes.
However, concerns have been raised concerning the issue of social inequality with respect to these reforms, specifically for their potential to increase inequalities in late career and retirement transitions. One crucial issue is that certain types of workers will simply be unable to carry on working in ever-increasing older age. On one hand so called ‘silver workers’, who are well-qualified, enjoy their work and have supportive workplaces and employers, might have few problems working up to or even beyond the increased state pension age.
These workers are typically healthy and have good access to occupational pensions. Not only are they able to work longer, but due to having a strong occupational identity they often actually want to do so. On the other hand are what have termed ‘rust workers’, who are low-skilled and have minimal access to occupational pensions.
These workers are struggling to meet the requirements of the new credo of late retirement. They are caught between Scylla and Charybdis of working longer in often unfavourable working conditions to ensure a sufficient pension and the threat of unemployment.
These new social inequalities in retirement are the main research focus of the EXTEND project (Social Inequalities in Extending Working Lives of an Ageing Workforce). Within EXTEND, a special focus is set on one sector: the health and social care sector (HCS). The HCS is characterised by several aspects:
- Due to the overall ageing of the population leading to a rising demand for health and long-term care, the sector is continuously growing and its societal and economic importance is increasing.
- As a consequence, more (skilled and experienced) workers are needed. However, multiple countries, for instance the UK or Germany, report a shortage of personnel.
- One reason for this is the sector’s challenging working conditions, both mental and physical, which leads to absenteeism, burnout and leaving the sector entirely.
- The structure of the workforce is characterised by a high proportion of female workers, a high rate of part-time employment and the fact that the workforce in the HCS is older compared to other sectors.
Against the background of a shortage of skilled workers, extending working lives is one way to tackle the lack of supply. However, due to challenging working conditions, many employees already exit the labour market before they reach the official retirement age.
Part of the ongoing work in EXTEND is to consider age-management measures that have the potential to prevent or reduce social inequalities in the sector. We are currently conducting case studies in care organisations in three different countries (UK, Germany and Finland) to see if such measures have been implemented, how they were developed, and what potential effects they are having. Preliminary results show that promising strategies include allowing flexible working, mentorship programmes, ongoing skills training, and health promotion activities.
These age-management measures are generally aimed at supporting workers of all ages but may particularly benefit older workers (for example, given increasing care commitments for grandchildren or parents as people get older). We are also finding that age management typically does not play a large role within the HCS and the awareness of age-specific measures is rather low.
There is then great potential and a real need for a more serious consideration of these measures and how they can be implemented in health and social care to help ensure a healthy and happy workforce in future years – a goal that will only become more important as the sector grows. In investigating this issue, we hope that EXTEND can make a small but highly significant contribution to helping to understand how the agenda of extending working lives can be tackled in a fair and equitable way.
Daniel Holman, Researcher, University of Sheffield
Sebastian Merkel, Researcher, Institute for Work and Technology
Moritz Hess, Researcher, Institute for Gerontology at TU Dortmund University
Jana Mäcken, Researcher, Institute of Sociology and Social Psychology at University of Cologne/ Institute for Gerontology at TU Dortmund
For an overview on determinants of the increasing employment rate of older workers see the book Delaying Retirement: Progress and Challenges of Active Ageing in Europe, the United States and Japan).
For an overview on active ageing see the Mobilising the potential of active ageing in Europe (MOPACT) project.