Income from work after retirement: exploring policy lessons

Symposium organised by Eurofound

IFA conference

29 May 2012, Prague

Work after retirement:needs, interest & opportunities

Outline:

1. Trend in paid work after retirement in the EU27

2. Why have retirees been taking-up work?

3. Who are these working retirees and what do they do?

IFA conference symposium

“Income from work after retirement: exploring policy lessons”

29 May 2012, Prague

Hans DuboisEurofound, Living Conditions & Quality of Life unit

This presentation is based on: Eurofound (2012, forthcoming) Income from work after retirement. Dublin: Eurofound.

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More than 1 out of 10 Europeans between 65-69 does paid work.Up from 8.9% (2005Q4) to 10.8% (2011Q4).

1. TREND IN PAID WORK AFTER RETIREMENT IN THE EU27

%-point increase employment rate 65-69 year olds 2005Q4 vs 2011Q4

The drivers of work after retirement

WORK?

a) Need

b) Interest

Strength of each driver’s impact depends on individual & regional situations. c)

Opportunities

2. WHY HAVE RETIREES BEEN TAKING-UP WORK?

• Income Lower than before retirement Pensions are the principal source for most Europeans

• Cost Health, mortgages Public cuts increased cost for most

A) FINANCIAL NEED

Difficulties (some to great) with making ends meet, 65+ (2010)

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Source: SILC data from Eurostat online database, downloaded 20 Feb 2012

• Longer run: adaptation of pension systems, increased employment among younger cohorts and increased productivity can contribute to solving inadequacy

• More immediate: retirees have been taking up paid work

• Not only because of financial need, but also because many want to work after the retirement age…

B) INTEREST33% wants to continue working after official retirement age, especially those closer to retirement

8Source: Special Eurobarometer 378

Would enjoy paid job, even if you don’t need the money** (2010) 14-54 55-64 65+

Job Agree 47% 51% 64%

Disagree 34% 33% 21%

No job Agree 57% 47% 48%

Disagree 25% 33% 33%

In the EU27, around 1/5 works purely because of financial need

• Labour market Sufficient jobs Suitable jobs (e.g. skills mismatch)

• Individual Health Caring commitments Skills

• Company/government/collective labour agreements (institutional structures) Supporting services (public/private) Age-adapted workplaces No discrimination against older workers Flexible work arrangements Financial (fiscal, benefits) & legal arrangements

• Society Cultural: perceived to be ‘normal’/’acceptable’

C) OPPORTUNITIES

Who are they?

% employed, EU27, 65-69 years*

2006Q4 2011Q4

Female 6.6 8.0

Male 12.3 13.9

% employed, EU27*

2006Q4 2011Q4

65-69 9.2 10.8

70-75 4.4 5.2

Mainly male

Mainly healthy, relatively young retirees

Highly educated (& living in urban areas) more likely to continue working, but many lower educated as well, and medium is the group which shows most growth

% employed, EU27, 65-69 years* 2006Q4 15-64 65-69

2011Q4 15-64 65-69

Pre-primary, primary and lower secondary 48.4 8.4 44.6 8.5Upper- and post-secondary non-tertiary 69.4 9.7 68.1 10.5

Tertiary 83.2 19.0 81.8 18.1

Sources: * Calculated from LFS data from Eurostat online database, ** Eurofound analysis of ESS data

3. WHO ARE THESE WORKING RETIREES AND WHAT DO THEY DO?

What do they do? Most:

Source: Calculated from LFS data from Eurostat online database

• Self-employed more likely self-employed continue working

- not accumulate enough pension

- work more enjoyable and more important role in life

- succession issues

salaried more often become self-employed in retirement than vice versa- fulfil dream

- most attractive working conditions

- contractual formality, while effectively ‘salaried’

- no alternative

• Part-time • Temporary• Often in agriculture/fishery, rarely in public administration

Clusters of working retirees

Thank you!

Hans.Dubois@eurofound.europa.euDublin, Ireland