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Living Longer- Working Longer: Older workers in Ireland- Paul McGill CARDI
1. Centre for Ageing Research and
Development in Ireland
Living Longer – Working Longer
Older Workers in Ireland - Myths and
Realities
Belfast, 10 Nov 2010
Paul McGill, Strategic Research Officer, CARDI
3. Projected population change
3
0
100
200
300
400
500
2006 2011 2016 2021 2026 2031 2036 2041
NI projected rise in older population 2006-2041 (thousands)
85+
75-84
65-74
0
200
400
600
800
1000
1200
1400
2006 2011 2016 2021 2026 2031 2036 2041
RoI projected rise in older population 2006-2041 (thousands)
85+
75-84
65-74
4. Life expectancy at 65
10
12
14
16
18
20
1925-27 1950-52 1960-62 1970-72 1985-87 1990-92 1995-97 2000-02 2005-07
Numberofyearsexpected
Time periods
Figure 2.6: All-Ireland life expectancy at age 65
RoI male
NI male
RoI female
NI female
4
9. UK pension rates 2010
Single Couple
Pension (£) 97.65 (132.60) 156.15
(202.40)
Median wage 09 £356.70
Pension as % wage 27.4 (37.2) 43.8
(56.7)
60% median wage £214.02
Gap 60% (£) 116.37 (81.42) 57.87 (11.62)
RoI full contributory pension is €230.30
(Figures in brackets include full pension credit) See
9
13. Older people and work
13
0
20
40
60
80
100
120
140
160
All Ireland numbers in work by age group (2nd Q) 000s
55 -59
60 - 64
65+
14. Recession impact north and
south14
100
110
120
130
140
150
160
170
180
190
RoI numbers in work by age
group, 2nd Q (1998=100)
All <55
Age 55-59
All 60+
90
100
110
120
130
140
150
160
170
NI numbers in work by age group, 2nd
Q (1998=100)
All <55
55-59
All 60+
16. Recession, RoI employment by
sex16
-60
-50
-40
-30
-20
-10
0
10
20
15-19 20-24 25-34 35-44 45-54 55-59 60-64 65+
RoI change in numbers in work 2008-10
by age and sex (%)
Males
Females
18. Recession, NI employment by
sex18
-30
-20
-10
0
10
20
30
40
16-24 25-49 50+ 50-64(m) 50-59 (f) 65+ (m) 60+ (f) Total aged 16+
NI change in numbers in work 2008-10
by age and sex (%)
Males
Females
19. Where have all the workers
gone?
Many young people have gone into education and
training, which should bring longer-term benefits; no
statistics yet
Emigration from RoI rose by 20,000 to 65,000 (CSO)
Foreign workers left – 46,700 were non Irish
18,400 Irish nationals left
Of those who left, 91% were aged 15-44 and 60% were male
Knock-on effect: Ireland‟s population aged 20-29 fell by
32,500 or 4.3% in one year, with implications for age
dependency ratios
19
20. And increase in unemployment
20
0
10
20
30
40
50
60
70
80
90
100
Jan-Mar 2007 Jan-Mar 2008 Jan-Mar 2009 Jan-Mar 2010
RoI unemployment by age (000s)
15-19
20-24
25-34
35-44
45-54
55-59
60-64
23. Sickness and retirement (UK)
Survey of retired men by Parker (1980) and Walker‟s
(1985) study of early retirement in Sheffield both found
that ill-health had an important influence on the
retirement decision
Analyses of the ONS Retirement Survey (Meghir and
Whitehouse, 1995), suggested that ill-health was one of
the main reasons for retirement before state pension
age
Tanner‟s (1997) analysis of the 1994 Retirement Survey
found that 27% of those who left the labour force before
SPA cited their own ill-health as the main reason; a
further 5% attributed the decision to the ill-health of
others
See Lissenburgh, Stephen and Smeaton, Deborah (2003) Employment transitions of older
23
24. Work is good for your health
but...
“The relationship between employment and
health is close, enduring and multi-
dimensional. Being without work is rarely good
for one‟s health, but while „good work‟ is linked
to positive health outcomes, jobs that are
insecure, low-paid and that fail to protect
employees from stress and danger make
people ill.”
- Fair Society Healthy Lives The Marmot Review: Strategic Review of Health
Inequalities in England Post-2010
24
25. Detailed statistics
I will be happy to provide the data behind the
graphs in this presentation. Email paul@cardi.ie
Check out our website www.cardi.ie which is a
good source of information on ageing research
Thank you for your time and interest
25
Editor's Notes
There were 717,000 people aged 65+ on the island of Ireland at the latest count (and one million aged 60+). Most of the growth in older people has been women.The number aged 85+ has risen from 27,300 to 76,000, or 178% since 1961. In this 85+ group the number of women in NI has risen by 263%; at the other extreme, the number of older men in RoI rose by 93%.
In the Republic there will be 1.4 million people aged 65+ in 2041, three times more than now (462,000).In the same year the number of people aged 65+ in NI will reach almost half a million (493,000) , almost one quarter of the total population (24%).In Ireland as a whole there will be 1.89 million people aged 65+ and 2.43 million over 60, nearly one third of the population.
Longer life but not necessarily in good health. We have the technology and medical skills to keep people alive longer.
A man of 65 can expect to spend an extra three years not in good health if born in 2007 compared with 1999. For older women it is worse; unhealthy life expectancy has risen by a full five years.
A picture of modest improvements in healthy years and disability free years in expectancy at age 65. However, apart from NI men catching up on their British counterparts in healthy life expectancy, NI lags behind the rest of the UK.I’ll come back to the issue of health later on. At this stage I’ll pose the question of why people might want to continue working beyond 60 or 65.
One reason is that people need the money. The recent shocks of rapid rises in food and fuel, coupled with declining incomes from private pensions and savings mean that many need to stay in work or return to work.
The latest EU-SILC report, published after this statistical analysis was prepared, shows that relative poverty in RoI fell to about 11% in 2008 (12.1% for 65-74 age group and 9.9% for 75+). See http://www.cso.ie/releasespublications/documents/silc/Current/silc.pdf One issue for the future, especially in RoI, will be the continued decline in at risk of poverty rates even though actual poverty for older people could get worse. This is one of the weaknesses of a relative poverty index.
Source: Eurostat (18 January 2010). The 65+ relative poverty rate in Ireland is 21% compared with an EU average of 19% and a rate in the UK of 30% (provisional)We need to note that these figures are based on the 60% threshold figures in each country, which vary dramatically. For example it is €4,000 in Hungary (rank 1) and €16,500 in Luxembourg (rank 2). In Ireland if is €10,900 and in the UK €11,600
Another factor is that the economy needs older people, notwithstanding the popular conception that they are over the hill as far as work is concerned by the age of 50.In general, we assume that older people have seniority with resulting larger wages but there is counter evidence that highest pay is in the 40-50 age range. The extent to which, if at all, older workers become less productive depends very much on the nature of the job and the skills required.Quite a few studies have been carried out on productivity and wages at different ages. Some suggest an increasing gap between productivity and wages as workers get older; some suggest that productivity peaks at around 40-45 and then remains stable and some find no evidence of age differences. This graph shows one conclusion from a very recent study in the Netherlands. But the authors refined this finding and discovered that: “the age profile of productivity is rather flat until age 50, after which productivity declines; wage costs are flat over the entire age range.” They conclude: “To the extent that there is a productivity-wage gap at high ages this age effect is bound to be small.” (p21)Note that most studies are in manufacturing, where productivity is easier to measure whereas most growth in recent decades has been in services. In addition they do not factor in things like levels of skill or education, which are strongly correlated with productivity.All of this is academic – if we don’t have the younger workers and cannot fill vacancies by immigration, we require older workers.Van Ours, Jan C and Stoeldraijer, Lenny (2010) Age, Wage and Productivity, Institute for the Study of Labor, Bonn, IZA
Older people have been keen to work longer and over the period of economic growth were able to do so. In Ireland, north and south, the number of workers aged 55+ rose by 45% between 1998 and 2009.We need to encourage this trend. A very broad issue taking in age discrimination, changes in working hours and practices, legal entitlement to request flexible working, the default retirement age, giving older workers the opportunity to switch to less demanding work (big organisations).Older people have ambitions as well. More want new challenges and more responsibility than wish to downshift – Smeaton, Deborah, Vegeris, Sandra and Sahin-Dikmen (2009) Older workers: employment preferences, barriers and solutions. Manchester, Equality and Human Rights Commission.
There was a huge increase in total employment in RoI in the boom. Since then the decline in numbers at work has been steep. People aged 55-59 have been unaffected but the number of people aged 60+ in work has fallen by 7,000 (5.2%) after 10 years of unbroken expansion. The NI picture is similar but less extreme – less growth between 1998 and 2008 but smaller decline in numbers at work since then – 2% for people aged 55-59. Re people aged 60+ in NI; their numbers in jobs have increased in each of the last four years.
This updates the data to first quarter 2010. There has been a fair bit of comment north and south, on the large number of young people losing work and these figures from RoI show why. Overall there was a huge increase in total employment in RoI in the boom. Over the last two years numbers in employment have fallen by 266,000, one eighth of the previous workforce
In every single age group men have fared worse than women. Among older workers, there is a pattern of male employment falling but female employment rising over the last two years.
We can see that NI has suffered much less in the recession so far and the number of older people in work has continued to increase or, in the case of the oldest group, remain unchanged. NI is heavily dependent on public sector spending whether people are employed in the public, private or voluntary sectors, so it will be severely affected by a 25% cut in departmental spending.
First of all, there hasn’t been a dramatic change in employment by sex in the oldest group; the numbers are small and source data are rounded to nearest thousand so the male increase from 9,000 to 12,000 is a bit misleading. Taking all workers aged 50+, number of men rose from 101,000 to 106,000 and women from 76,000 to 78,000. The overall picture is more varied than in the Republic – sex differences are much less noticeable, though men lost more jobs than women.
These figures are for year ending April 2009
The rise in unemployment for the very youngest (15-19) is lowest of all even though this group has declined dramatically in participation in employment – they have gone back to college or left the country rather than signing on.The three age groups 25-54 have all experienced rises in employment of more than 200%, while people aged 55-59 have seen a lower increase of 170%. Male unemployment has increased twice as fast as female – 222% compared with 113% (construction industry). However, in the 55-59 age range, female unemployment rose by 193%, rather worse than the male increase of 158%.
I said I would return to health because we need to explore the implications of recent policy changes in both the UK (including NI) and the RoI. Working may be good for your health and wealth in general. But in raising the pension age speedily we may be in danger of exacerbating social class inequalities in health and mortality. This graph shows the very big differences that exist in England in death rates of men by social class. In the NE, for example, 700 per 100,000 for routine workers compared with 200 for professionals.Fair Society Healthy Lives The Marmot Review: Strategic Review of Health Inequalities in England Post-2010 (2010). See http://www.marmotreview.org/AssetLibrary/pdfs/Reports/FairSocietyHealthyLives.pdf
This graph, also from Marmot review, shows that there can be a 17-year difference in the average age at which the most deprived people become disabled compared with the most advantaged.
Quite a few studies show that we can’t apply a single model and that sickness and disability affect the work life of up to one third of older people – the ones with low levels of skill, education; they are also the ones who typically earn the lowest wages and can least afford to retire.
So we can conclude that very many, perhaps most older people wish to work longer, partly for positive reasons (they like the job and the social contact) or negative ones (they do not have adequate pensions) or a mixture of both. In addition the economy needs them. However, a rapid increase in the SPA could be condemning very many older people to poverty – neither able to work nor entitled to draw the state pension
