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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
Recent population change
0
100000
200000
300000
400000
500000
600000
700000
800000
1961 1971 1981 1991 2001 2006-08
All Ireland older population
85+
80-84
75-79
70-74
65-69
2
Projected population change3
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
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
Num
ber
of
years
expect
ed
Time periods
All-Ireland life expectancy at age 65
RoI male
NI male
RoI female
NI female
4
Background
Boom and bust: job creation and losses
Fear about future (Hillyard et al)
Pension age rising to 68 ... and higher?
Older workers‟ pay
Health and disability
Age-friendly workplaces
Ageism and discrimination
Cutting across these - low awareness, little research
5
The boom, RoI6
100
110
120
130
140
150
160
170
180
190
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
RoI numbers in work by age group, 2nd Q (1998=100)
All <55
Age 55-59
All 60+
The older people’s boom, NI7
90
100
110
120
130
140
150
160
170
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
NI numbers in work by age group, 2nd Q (1998=100)
All <55
55-59
All 60+
Job losses in recession, RoI8
-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, first quarter 2008-10, by age and sex (%)
Males
Females
Job losses in recession, NI9
-30
-20
-10
0
10
20
30
40
16-24 25-49 50+ 50-64(m) 50-59 (f) 65+ (m) 60+ (f)
NI change in numbers in work, first quarter 2008-10, by age and sex (%)
Males
Females
Three issues – young and old
1. Older workers are at the top of their pay
scales, earning a lot for what they‟re doing.
2. Early retirement frees up jobs and gives young
people a fair chance (so raising the pension age is a
bad idea) – inter-generational equity.
3. After all, they‟ll get good pensions if they do retire.
10
1a Actual pay by age RoI11
£0
£2
£4
£6
£8
£10
£12
£14
£16
£18
£20
Male FT Female FT Male PT Female PT
18.23
15.44
13.513.96
RoI median hourly earnings, full-time and part-time by sex and age group, 2007
25 - 29 years
30 - 39 years
40 - 49 years
50 - 59 years
60 years and over
1b Actual pay by age NI12
£0
£2
£4
£6
£8
£10
£12
£14
Male FT Female FT Male PT Female PT
13.63
12.64
10.17
8.96
10.43
8.86 9.6
7.83
NI median hourly earnings, full-time and part-time, by sex and age group, 2009
22-29
30-39
40-49
50-59
60+
1c NI weekly, full-time13
£0
£100
£200
£300
£400
£500
£600
18-21 22-29 30-39 40-49 50-59 60+
NI median weekly earnings of full-time workers by age and sex 2009
Male median
Female median
Back to the three issues
1. Older workers are at the top of their pay
scales, earning a lot for what they‟re doing.
2. Early retirement frees up jobs and gives young
people a fair chance (so raising the pension age is a
bad idea) – inter-generational equity.
3. After all, they‟ll get good pensions if they do retire.
14
2a Older workers – new pattern
In previous recessions it was „older workers out‟. But..
Many pension schemes have closed or are less
generous; public sector clamping down on „extra
years‟ – so employers have fewer incentives to offer
older workers to retire
Employment protection laws make it more difficult to
sack older workers or refuse to employ them
More older workers seem to want to hold on to their
jobs – whether for positive reasons (they like their
work) or negative ones (can‟t afford to retire)
15
2b Freeing up jobs
Hypothesis: early retirement would create jobs for
young people.
So, high rates of older employment would be
associated with high rates of youth unemployment.
In fact there is a negative correlation in EU 27+3
between youth unemployment and the employment
rate of older workers
Of the 10 countries with higher YU rates than Ire, 3
have higher rates of OP working and 7 have lower
16
2c European evidence
Youth unem 55-64 work rate
Netherlands 6.6 55.1
Norway 8.9 68.7
Denmark 11.2 57.5
Ireland 24.4 51.0
France 23.3 38.9
Spain 37.8 44.1
Italy 25.3 35.7
Overall correlation: -0.15694 Eurostat (2010)
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2d Economic activity
It‟s not a zero sum game. Spending power by older
people generates economic activity, which can create
jobs for younger people.
“Working longer benefits the state and wider
economy by reducing public expenditure on
benefits, raising tax receipts, boosting employment
and raising economic growth” (UK government)
Early retirement is costly to the budget, raises labour
taxes and leads to less job creation (Torres OECD)
18
2e Economic activity
In the Irish context these benefits have been argued
for higher employment rates among older people:
They boost labour force growth and thus offset the
negative impact of population ageing on economic
growth;
They reduce pressure on public finances through later
retirement and increased tax and pension
contributions;
They smooth the pace at which employers will have to
adjust the composition of their workforce. (TILDA 2010)
19
2f Need for older workers
Must think beyond short term – the skills and
dedication of older people will be needed:
Old age dependency ratio projected to rise by 2031
from 26 to 34 per 100 working age adults in NI
from16 to 28 per 100 in RoI
Of the 65,000 who left RoI last year 91% were 15-
44 (and 72% were foreign nationals)
We cannot depend on young foreign nationals to
come back and fill our skills gaps again
20
Issue 3 “They’ll get a good pension”
In RoI, the full contributory pension of €230.30
works out at 33% of average pay. In NI, State
pension is only £97.65, about 27% of average pay
Perhaps this explains why only 63,000 people in
RoI have retired before the age of 65; a mere
18,000 in NI (women 60)
21
Health and retirement
Being in work is good for your health and wealth – in
most cases
People tend to become more sick and disabled as
they get older
Health problems are important causes of decline in
work rates in older age groups
Important social equity issue - people in unskilled or
manual work are most likely to be sick/disabled
Can we make work healthier and safer?
22
Later retirement – not good for all
In NE England, male death rate is 700 per 100,000
for routine workers and 200 for professionals.
“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.”
(Marmot M, 2010: 68)
23
Conclusions
In both NI and RoI there was no „zero sum game‟ in
the good years; there were jobs for all ages
It may be a „minus sum game‟ – any older workers
who retire will probably not be replaced at all
Looking to the future, older workers will be needed
and will stimulate economic activity to benefit all;
need better training and work changes
As dependency ratios rise, older people will be doing
a favour by supporting themselves for longer rather
than expecting younger people to do it for them
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Conclusions 2
Some work can harm health, especially in routine
and manual jobs
We may exacerbate social class divisions by
increasing State pension age – condemning many
working class people to sickness and/or benefits
Need a great deal more research eg why people
retire (eg job satisfaction, income, health, hobbies)
Opportunities for down-sizing and for greater
challenge. Need research on employers‟ attitudes
25
Detailed statistics
I will be happy to provide the data and references behind the graphs in this presentation.
Email [email protected]
Check out our website www.cardi.ie which is a good source of information on ageing research
Thank you for your time and interest
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