'How can we support older workers?' an ILC-UK European policy debate, supported by Prudential

European policy debate:
How do we support older workers?
3rd September 2013
This event is kindly supported by Prudential
#workinglongereu

Welcome
Tim Fassam
Head of Public Affairs
Prudential
This event is kindly supported by
#workinglongereu

Welcome
Baroness Sally Greengross
Chief Executive
ILC-UK
#workinglongereu

Steve Webb MP
Minister of State for Pensions
Response to Research
#workinglongereu

David Sinclair
Assistant Director, Policy and Communications
ILC-UK
Working Longer: An EU perspective
#workinglongereu

The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.
David Sinclair, International Longevity
Centre – UK @ilcuk @sinclairda

Thank you
Thanks also to Gordon Scott, Tim Fassam and
Prudential for making this piece of work possible.
Brian Beach, Jessica Watson
And: Matt Hawkins, Michelle McGagh, Trinley Walker.
The participants at our consultation event in Brussels
in June 2013. Including our speakers at the event,
Rebecca Taylor MEP, Oscar Vargas (Eurofound), David
Lain (University of Brighton), Clare Talbot (Department
for Work and Pensions, UK). Thanks particularly to
Maureen O’Neill (President of the Social Affairs
Section, European Economic and Social Committee),
for hosting the event.

Working Longer: An EU Perspective
 Explored what works
 Why do some EU
countries do much better
than others when it
comes to older workers?
 Policy and evidence
review
 28 country profiles
 Event in Brussels (EESC)
 Incorporated latest
statistics
 ILC-UK are an international
organisation
 One of 14 members of the ILC
family (USA; Israel; India;
China; Brazil; South Africa..)
 We are currently working on
European projects on
immunisation; constipation;
health seeking behaviour; IT
 Frequently called on to speak
internationally

Explored the
role of
innovation
in extending
working
lives
Extending working lives
Discussed
the macro-
economic
importance
of
extending
working
lives
Highlighted
the
need for a
new
narrative
about
retirement.
Highlighted
the barriers
to gradual
retirement
for older
workers.
Made the
case
for focusing
on the
demand for
older
workers
Set out
the
reasons
why
people
retire
when they
do

Summary
Participation rates of older workers
across Europe
Why do we need to work longer?
What is the EU doing?
Seven challenges to overcome
What should we do?
Messages for the Minister

Participation rates of older workers across
Europe

Who “does” older workers well?
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Over 80% of men and 70% of
women aged 55-64 in Sweden
are part of the labour force.
Fewer than one in five women
aged 55-64 in Malta are in
work.

When would Tintin retire?
The Labour Force
Participation of Belgians
aged 55-64 is under
50%
In 1929 Tintin was 14-
17
He would now be
between 97 and 100
He would (probably)
have retired a long time
ago
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ayQUvK-axqX7E-7H8VNP-7H8bMg-7Hc7VG-7Hc8vW-7H8WeF-
auFs3Z-7ZN6ig-8gGkU5-9xQ22w-bcC9rx-9Cpaxt-a3k2jx

A culture of early retirement
Belgium has a strong culture of early retirement, which
puts it among the countries with the lowest levels of
older workers. In 2006 the Solidarity Pact between
Generations was introduced, including a goal to
increase the employment levels of the older age group
(55+). Since these measures were introduced, the
Belgian government has supported a number of
initiatives such as workplace improvements,
intergenerational relations in the workplace and health
at work schemes. In 2012, the OECD reported that its
impact on these fronts had been ‘minimal’.

Since the 1970s..
1970s-90s: Long-term falls in the participation
of older workers continues due to
unemployment; public and private pension
schemes incentivising early retirement; and
the provision of relatively generous pension
schemes and social security.
1995-2007: The long-term falls in employment
of older people across Europe begin to reverse
as incentives to retire early are reduced.
Post 2007: The growth in the participation of
older workers across Europe continues despite
the recession. However, unemployment
amongst older people increases.

The Netherlands – a typical example?
The Netherlands saw huge falls in
employment of older workers between the
1970s and 1990s. Labour marker
participation of older men fell from 81% in
1971 to 42% in 1993. This drop has been
attributed to ‘a generous social security
system that has actively promoted early
retirement’. Nonetheless, it has also
witnessed the sharpest participation level
increase among OECD countries during the
subsequent decade, up by more than 16%.
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9S4qFw-9S4vG9-9S1GJi-9S1Hhk-9S4fCL-9S4Af3-9S4u49/

“Europe” is interested in older workers
In 2001, the European Council of Stockholm set a target
to increase the employment rate among older workers
(55 to 64) in the EU to 50% by 2010, up from 37% in
2000.
The 2002 Barcelona Target then set the ambition of
adding five years to the average age at which workers
exit the labour market.
The EU’s flagship Europe 2020 growth strategy targets a
75% employment rate for workers aged 20-64 by 2020.
Achieving this will require increased participation of
older people in the workforce and a reduction in rates of
early retirement and labour market exit.

Half of 55-64 year olds across Europe are not in work

Labour Force Participation rates by gender for people
aged 55-64 in 2012

Participation is up
Across the EU,
the Labour
market
participation
of older
workers is up
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Changes in Labour Force Participation of Males aged
55-64, 2002-2012

Changes in Labour Force Participation of Females
aged 55-64, 2002-2012

Percentage of men aged 55-64 in employment in 2002
and 2012

Percentage of Women Aged 55-64 in Employment in
2002 and 2012

But it is not time for complacency
 Across Europe, just under one in three of those
aged 60-64 are in employment
 Just 13% of Hungarians aged 60-64 were in work
in 2010 compared to over 60% of Swedes.
 There are still countries where fewer than 40%
of people aged 55-64 are in employment
(Slovenia, Malta, Greece, Croatia, Hungary,
Belgium and Poland in 2012).
 In one third of Member States, no more than
one out of ﬁve workers (60-64) is employed.’
 Over the period 2002-2008, the average age of
labour market withdrawal among the EU-28 had
only increased by an estimated 1.3 years, from
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9WDMaM-89dsU1-7TYQKU-dBf26o-84k1CX-eeoG5V-eYkq5p-eYkrkr-eYkt5c-eYkqER/

Why do we need to work longer?

We are living longer

And more of us expect to work longer
A 2010 survey of 7,500 citizens in ten European countries found an
expectation among 55% of respondents that working lives would extend
beyond current national ‘retirement ages’.
But we still don’t like the idea of higher “retirement ages” ‘a 2012
Eurobarometer survey showed most Europeans (60%) reject the need
for higher retirement ages.

And we will need the money
Adapted from
Aon 2010
State Pension Age
has increased
(and/or become
less generous).
Unless we extend
working lives
there are
significant risks of
future pensioner
poverty

Governments are beginning to link SPA to longevity
In Sweden, pension entitlements are adjusted on
the basis of expected life expectancy at the time of
retirement.
The Greek government has created an automatic
adjustment mechanism that will kick-in in 2020 and
will incrementally increase the statutory retirement
age in line with increases in average life expectancy.
The UK is exploring how to link pension age to life
expectancy.

Fewer workers
The number of working age adults across Europe has
begun to decline across the EU-28. Despite the recession,
some sectors of the European economy already suffer
from skills shortages.
There are 13.5 million UK job vacancies, which need to be
filled over the next ten years, but only seven million young
people are projected to leave school and college over that
time.
A report published by the Dutch Ministry of Interior and
Kingdom Relations has suggested that by 2020 ‘there will
be gaps of 30% or more in the employment pool for
teachers and policemen, and even higher gaps for nurses’.
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aeEDbp-aeECQM-9qWM9P-fAtoq9-bY34zN-
aJDtZF-8XMw7e-8x61Sr-asR8ab-84RcrD/

Projected Old-Age Dependency Ratio, 2010-2060

Migration won’t solve the problem
The EU will receive over 60 million net
migrants over the next 50 years (yearly
average of around 0.2% of the EU
population).
Although inward migration could play a
part in reducing dependency ratios, the EU
would require a far higher level of net
migration to maintain the current
dependency ratio (an additional 11 million
migrants by 2020).

And migration within the EU is creating significant
problems for some member states
With over a million Bulgarians currently choosing to live and work
abroad Bulgaria is increasingly suffering from an exodus of
people of working age. Eurostat estimates that in 2060 Bulgaria’s
old-age dependency ratio will hit 60% – and at that stage it will be
the fifth highest in Europe. This problem is being confounded by a
low-birth rate and by poor public health – the latter of which is
prompting people to withdraw from the labour market prematurely.
The Bulgarian government has expressed its desire to take action
to promote economic activity amongst older workers and tackle
this worrying trend towards a reliance on an increasingly small
working-age population

The cost of ageing
Across the EU, age-related spending is
projected to rise from an annual cost of 25% to
29.1% of GDP between 2010 and 2060.

Europe’s Economy needs older workers
 Older workers are likely to play an important
part in delivering future EU economic growth
 The lump of labour fallacy has been debunked
“States with the highest employment rates
for older workers also have some of the
lowest youth unemployment rates.’
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6nzjkK-6oLoJ3-6tE2Zp-6tE2Zt-6tE2Zz-6Azi8D-6Azj1X-6C6Jc3/

A retirement, not an ageing problem

EU Initiatives supporting working longer
Pensions and retirement
 Promoting ‘adequate, safe and sustainable’ pensions
 Encouraging Member States to reform public pensions systems
Employment law, equality and age discrimination
 Legislating on age discrimination
 Support and promotion of Member States’ policies
 Creating strategies around active ageing and extending
working lives
Structural and cohesion funds
Funding research
Funding programmes such as FP7

EU support to national policymakers: coordinated
strategies and mutual learning
 Understanding demographic change
 The European Employment Strategy
 The Open Method of Coordination (Social Inclusion
and Social Protection)
 Challenging age-based discrimination
 Equal opportunities for people with disabilities
 A strategy for gender equality
 Social innovation
 The EU Programme for employment and social
solidarity (Progress)
 Public health priorities, physical activity promotion
and funding
 Promoting accessibility and mobility
 Promoting ICT for active ageing
 Encouraging lifelong learning

European Social Fund
Slovakia has used the €1.5 billion received from the
European Social Fund in 2007-2013 to invest in
education and training. From 2007-2011, 24,000 new
jobs were also created. Although these jobs were not
specifically for older people, the project does aim to
establish a lifelong learning culture in Slovakia.

Seven challenges to overcome

Seven Challenges to overcome
 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
 Recognising the diversity of the working
experience

Achieving gender equality
In every EU Member State, the life expectancy of women is higher than
that of men, by 5.9 years on average.
Yet despite living longer across the EU, women participate less in the
labour market and retire earlier.

Pension equalisation
Increasing the employment rates of older women is important in the
context of the move towards gender equalisation of pension ages across
Europe.
 In 2009 13 Member States had lower pensionable ages for women
than for men.
 By 2020, 18 will have equalised pension ages.
 Five further Member States have long-term plans to equalise
pension ages, and just four have no legislation in place to do this.

Are things changing?
In the UK, 30 years ago women’s work was mainly low-
skilled manual work. Now those women working in
their 50s are working at similar levels - if not pay - as
men.
There is a significant gender divide in Malta. While
74.6% of males in the 55-59 age group are in
employment, the figure shrinks to 22.5% for women.
The main reason for this withdrawal from the
workforce (generally and also specifically for women)
is not due to retirement but a culture in which families
are the main care units for the old, young, or disabled.

Gender difference in employment rates of people
aged 55-64, 2012

Skilling up the older workforce
The current cohort of older
workers in Europe have low
levels of education and
qualifications compared to
younger groups, and are more
likely to have worked in
agriculture and production
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bxEvrf-bLzdct/

In Poland, 350 universities have registered to become
Third Age Universities as part of a scheme designed to
promote more flexible learning for older people. The
Polish programme 45/50 PLUS provides on-the-job and
vocational training for older people to help them return to
the job market.
In order to increase the education and training
opportunities, the German government intends to
introduce greater flexibility to working time and open up
more sabbaticals for its older workforce.
The Estonia Unemployment Insurance Fund (EUIF) has
therefore invested in mentoring and counselling schemes
for older workers.

Supporting older people in the recession
In all recessions before 2008, older workers were treated as a
disposable resource: the first to leave, encouraged by early retirement
and generous redundancy schemes.
Increasing unemployment over recent years has meant that European
policy-makers particularly at a Member State level, have not had an
adequate incentive to invest in policy initiatives to improve access to
the workplace for older workers.

Portugal, Spain, Cyprus, Greece, and Ireland,
the countries arguably hardest hit due to the
economic crises, have seen falls in the
employment rates of men aged 55-64.
But these countries are not alone; of the 28
Member States just seven - Malta, Austria,
Germany, Poland, Bulgaria, Finland and
Slovakia – have seen unemployment fall
between 2002 and 2012 for men aged 55-64,
with Slovakia witnessing the largest fall in
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Unemployment rate of men aged 55-64 in 2002 and
2012

Unemployment rate of women aged 55-64 in 2002
and 2012

Long-term unemployed (12+months) as % of total
unemployment for people aged 55-64 in 2012

The current (2012)
unemployment rate in Finland
is around 7.5%, below the EU
average, and the employment
levels of older people have
increased more than
employment overall. However,
older workers are often over-
represented among those
made redundant.
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Matching demand and supply in the labour
market
 Is Europe’s economy
creating the right jobs to
meet the needs and
wishes of the supply of
older workers
 A need for a focus on
demand. More part time
work opportunities?
http://www.flickr.com/photos/viskadourakis/3468991141/sizes/
m/in/photostream/

Tackling ageism
A survey of employers from five European countries in 2010 found large
numbers of employers opposed to the idea of employees working even
past 60, let alone 65
 Kelly Services reported that ageism was a bigger issue than gender
discrimination in Hungary.
 In Romania, ‘the labour market and its actors are still relatively less
positive to older workers’.
 Employers in Greece tend to view age as an inhibitor to productivity,
rather than seeing the benefits that experience and knowledge can
bring.
 Despite ageism being a particular challenge in Estonia, there are at
present few if any efforts made to create an age-friendly culture
amongst employers and the general population.

Improving health
45% of survey respondents were
concerned about health as a barrier to
working longer. In Germany and
Norway, about two-thirds of
respondents said this was their main
worry (Aon 2010)
Our analysis has found relatively few
initiatives by governments or
employers to explicitly improve the
health of older workers.

 All Portuguese workers of 50+ are now required to carry out annual
general medical exams.
 Ageing at Work is a European Commission supported project that
develops training for HR professionals on health and age
management at a European level.
 The Work Ability model developed by the Finnish Institute of
Occupational Health offers a framework and set of interventions to
help organisations make the necessary adjustments.

Recognising the diversity of the working experience
 Older workers across Europe are
more likely than other ages to be
self employed, on open-ended
contracts, or working part-time.
 We need to better understand the
informal economy in relation to
older workers?

What should be done to support working
longer?

Taking a life course approach to working longer
A high percentage of people aged 25-49 across Europe are in
employment (78% in 2010), and there is not significant variation across
the EU (between 70% in Spain and 85% in Sweden).
The EU and Member States should not seek to ‘pitch one generation
against another’ in creating opportunities for extending working lives;
The EU and Member States should begin to measure labour market
adjusted dependency ratios;
Member State initiatives to support flexible working should be
accessible to people of all ages;
People of all ages should be supported and encouraged to take up
learning opportunities.

Better use of fiscal incentives to support working
longer
 The EU is right to continue to promote increases in state pension
age as a tool not just for fiscal sustainability, but to nudge an
increase in the participation of older workers;
 Member States should not assume that increases in pension age
alone would automatically increase retirement age. Member
States will also need to do more to support and encourage, rather
than just force, working longer;
 The EU should evaluate the impact of pension reform on extending
working lives;
 Member States should remove any existing incentives for early
retirement that remain within their state pension systems.
 Member States should explore policies that consider the impact
retirement has on couples, not just individuals.

What works?
 A nation-wide measure in Bulgaria to encourage businesses to hire
unemployed persons of aged 50 and above had, by 2011, hired an
estimated 500 people, whilst another scheme (HRD) had been
estimated to have helped just 100 older people back into work.
 In Spain, the government attempted the introduction of partial
pension systems. This programme had poor take-up.
 Belgium introduced a 2006 Solidarity Pact between Generations,
including a goal to increase the employment levels of the older age
group (55+). The Belgian government has supported a number of
initiatives such as workplace improvements, intergenerational
relations in the workplace and health at work schemes. In 2012, the
OECD reported that its impact on these fronts had been ‘minimal’.

 A Portuguese New Opportunities Initiative gives preferential
access for older people to lifelong learning. So far, however,
this has registered a very small number of workers of age
55+.
 As of 2008, employees in Poland aged 45+ have been able to
use the services of the Labour Office for vocational training
and financing the cost of personal qualifications. In 2010 just
601 employees aged 45+ received training support through
the Labour Office.
 The Portuguese Intervention Programme for the Senior
Unemployed was launched to stimulate job creation for older
workers. From 2008-2010 this reached just half of the
number of unemployed it was expected to reach (an
expected 90,000 people).

Incentives to early retirement remain
 There are positive disincentives in
Hungary to remain in work
because pension wealth actually
declines after the age of 60.
 Early retirement schemes have
played a major part in reducing
the participation of older people
in the workforce in the Czech
Republic.

Creating more, better and more appropriate jobs for
older workers
 The EU should better promote the potential to use the European
Social Fund to provide more support for older workers;
 The EU and Member States should better promote good practice in
workplace and job adaptation.
 EU and Member State initiatives to tackle age discrimination should
continue;
 The UK’s experience of removing the default retirement age should
be evaluated with a view to speeding a process of ensuring that
older people may not legally be discriminated against in employment
simply because of their age;
 The EU and Member States should continue to ensure that
workplaces are appropriate and safe for an older workforce;

Creating more, better and more appropriate jobs for
older workers
 Member States should take a strategic approach to working longer
rather than introduce ad-hoc initiatives. The strategic, long-term
approach should involve employers, employees and trade unions;
 EU regional policy should support the creation of jobs for people of all
ages. It should recognise and respond to the challenges of ageing
regions and understand the diversity of approaches needed at a
regional level;
 The EU and Member States should focus more attention on demand
side solutions to extending working lives. Creating the sort of jobs for
an ageing society;
 The EU and Member States should recognise that public sector
spending cuts may have a negative impact on the employment
opportunities of older people and initiatives must be put in place to
ensure public sector employees can transfer their skills to other
sectors.

Gradual retirement and flexible working is vital
France has introduced a gradual retirement scheme, which allows
workers to reduce their working hours on reaching 60 (62 in 2017) and
receive a proportion of theirpension in return.240 However, take-up has
been low and the OECD has argued that the scheme should better
support employees in their negotiations with employers.
In 2007, Austria, Norway and Spain introduced phased retirement
systems.
Changes to the Labour Code were introduced in 2012 in Czech Republic
to help increase flexibility in working hours and to reduce severance pay
when someone has been employed for two years or less.242

 Lithuanian law provides a legal-base
for working part-time or with flexible
hours, but this is rarely enforced; in
2010, just 8% of Lithuanian workers
were working part-time.
 Flexible working practices and
additional leave have also been
introduced in Slovenia to encourage
people to stay in work for longer. http://www.flickr.com/photos/regus-
media/5839014005/sizes/m/in/photostream/

Tackling inequalities
The EU and Member States must continue to
promote lifelong learning
Age should not influence access to training
opportunities
The EU and Member States must invest in
tackling health inequalities
The EU and Member States should explicitly
target initiatives at increasing the participation
of older women in the workplace;

Ensuring the research agenda contributes to
extending working lives
 The Commission research agenda must promote ‘what works’ in
extending working lives;
 The Commission and Member States must engage and support
researchers interested in better understanding the motivations of
extending working lives;
 The Commission research agenda could better understand and
promote the best ways the private and public sector can adapt jobs
to meet the needs of an ageing society;
 The Commission research agenda must explore how to tackle health
inequalities and should monitor age discrimination and its impact on
older workers.

Inadequate focus on care as a barrier to working
longer
The EU and
Member States
must ensure
that care-giving
is not a barrier
to working
longer.

Messages for the Minister
 Can we aim to push our way up the participation tables? We could
lead the world. How can we work together to get there?
 Focus extra policy efforts on skills, gender issues and health and care
 Keep talking positively about older workers and their importance
 Be honest. Keep reminding people they are going to have to work
longer. Move the social norm.
 Evaluate what works (independently). We don’t really know what
works across Europe.
 Plan for the long term (Take a strategic approach to older workers)
 Get your colleagues in other departments involved. How can we
engage other departments (e.g. BIS, DFE and DH)?

Many thanks
David Sinclair
Assistant Director, Policy & Communications
International Longevity Centre
Davidsinclair@ilcuk.org.uk
02073400440
Twitter: @ilcuk
and @sinclairda

Response to Research
#workinglongereu
Christopher Brooks
Policy Adviser for Employment and Skills
Age UK

Panel Debate and Q&A
• How can we tackle the barriers to working longer amongst
older women
• How can we improve the skills of older people across
Europe
• How can we tackle ageism in employment
• How can we encourage employers to improve the health of
their workforce
• How can we get employers to innovate for an ageing society
• What would your policy priority be for the EU/UK
#workinglongereu

'How can we support older workers?' an ILC-UK European policy debate, supported by Prudential

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'How can we support older workers?' an ILC-UK European policy debate, supported by Prudential