School of Business and Economics University of Edinburgh 1 Extending Working Lives Wendy Loretto The University of Edinburgh Scottish Policy Innovation

School of Business and EconomicsUniversity of Edinburgh

1

Extending Working Lives

Wendy Loretto

The University of Edinburgh

Scottish Policy Innovation Forum

11 April 2008


2

On the threshold of a new era?

In an era of workforce ageing and increasing life expectancy working longer may be presented as an ‘unavoidable obligation’.

The Government’s urge to extend our working lives is summed up in the title of the recent OECD review of policies: Live Longer, Work Longer.


3

The Government role in extending working life

• Legislation on discrimination• Raising state pension ages• Reducing incentives in benefit and pension regimes to

retire early or take ill-health or disability pathways out of work

• Active supply side labour market policies, e.g. encouraging or subsidising people back into work; making work pay through tax regimes, training measures

• Less able to affect demand for older workers?


4

Increasing state pension age

• Women have seen most significant change up to 65 by 2020 and then for both sexes up to 68 by 2044

• Generally unpopular, seen as Government withholding deserved right to a pension at 65

• Average retirement ages;

* men – 63

* women – 61 (Phillipson and Smith, 2005)


5

Economic activity status of women and men aged 50+ (GB)

Age % In employment % ILO unemployed

% Inactive

Women Men Women Men Women Men

50-54 75 85 2 3 23 12

55-59 64 75 2 4 34 22

60-64 33 55 1 2 66 42

65-69 11 20 # 1 89 79

70+ 2 5 # # 98 95

Total (50+)

32 45 1 2 67 53

Notes: # Less than 0.5% (numbers too small to be statistically reliable).Source: Analysis from Labour Force Survey, Jan-Mar 2007 (weighted)


6

Current qualitative research

• Commissioned by DWP – ‘Extending working lives’• Collaboration with Sarah Vickerstaff (University of Kent)• Interviews with couples and individuals (96 people – 49

women, 47 men)• Based in three areas: Edinburgh, Nottingham and Thanet• Sample selected on the basis of age (50-64), income, labour

market status, health and domestic circumstances


7

Overview of attitudes

1. Not considering working for longer or after retirement

• Strong feelings of having done enough• Caring responsibilities• Tax effect on pension• Jobs available• Retirement as release from a boring job


8

2. Would consider working for longer or after retirement

• Preference for flexible work, part-time or short contracts: ‘

a little part time job’• In a different job• Strong gender differences: women give social reasons or

need to keep busy• Little sense of planning for this: fantasy jobs• Work needing to fit round other aspects of life and not vice

versa as had been the case during much of working life

Importance of choice


9

Major influences on decisions

• Ability to exercise choice unevenly distributed

• Caring and health issues blend with finance and job satisfaction to exert push and pull effects on continuing work

• Major gender differences reflecting gendered work histories and experiences


10

No because I only worked part-time, I never… and although it was a different way, you know, people used to pay stamps, big stamps, wee stamps, as they were called, so that was all… and because I never settled really until I was probably 26 and then studied for 2 years and then worked for 2 years and then stopped working, so really by the time I got back into the workforce I was about 35, 36, so… and that would be right – 45 I started paying into… (ES46_F)


11


• Role of employers is likely to be pivotal in influencing attitudes towards retirement v. working longer

Do you know what I think would have been a nice thing for somebody to have to do, even though you’re retiring, is have somebody in from a careers service. So that you’re not being written off. You’re retiring, you’re stopping one job, but there’s still lots of options open to you that you could.. (EC35_F)


12


• Legacy of bitterness and mistrust over pensions issues

I mean we’ve tried to save some money over the years specifically as a buffer zone for when he did retire. What plans we had were scuppered, you know, when this war happened and all the exchange rate went down because suddenly it was index linked. We’ve been so discriminated against because over the years we tried to save something. You know I wouldn’t advise anybody to save any money nowadays. (TS22_F)


13


• Cynicism about Government’s motives for:

~ changing state pension ages

~ introducing Age Regulations

~ state pension deferral


14

“Personally I think it’s a bad idea because you’ve worked all your life and you want to get as much out of the government as you possibly can because they’re quick enough to take it off you” (EC50_M)

“”I think it’s a cop-out for the government honestly. It’s a way of them keeping the money, hoping you cop your toes and they keep the money!” (NS69_F)

“Yeah. So you die and don’t get anything. No way.” (TC14_F)


15


• Effects of erroneous or incomplete knowledge on attitudes and behaviour


16

Policy Implications

• Employers • Active consideration of how they may retain older

workers• Combining work with caring responsibilities • Accommodating health problems• Attention to job quality• Flexible work options

• Government – key role in addressing the information gaps

• State pension age/pension deferral• Pensions and financial advice


17

Report details

• Full report about to be published by DWP• If interested, contact me [email protected]

Documents

School of Business and Economics University of Edinburgh 1 Extending Working Lives Wendy Loretto The University of Edinburgh Scottish Policy Innovation