Between labour market and retirement pension — flexible transition as a new paradigm for ageing societies?

Increasing the pensionable age due to rising life expectancy meets strong political resistance. For health and labour market reasons it will always be impossible for some to achieve full pension eligibility directly from employment. Even if early retirement options are not restricted the scope for an accumulation of earnings to fund an early pension is often narrowly defined. Consequently, it is impossible for early retirees to compensate for the reductions in the pension they receive. Contrary to the general tendency to increase the pensionable age an alternative reform proposal is currently under discussion in German social policy circles. This involves free choice of retirement at age 60; unlimited accumulation of additional pension entitlements whilst earning; actuarial deductions for early retirement; and consideration of life expectancy in making adjustments to pension awards. This solution relieves the public pension system financially, raises the attractiveness of senior citizens on the labour market, offers the opportunity for a self‐determined transition from work to retirement and reduces political resistance to pension reform. The effect on the labour market for senior citizens remains to be examined.     

Social risks and public pension in South Korea

This study investigated how traditional and new social risks have emerged in South Korea and how policies have coped with them, focusing on the public pension program. Using national statistics data and publicly published government reports, factors such as marital status, economic activity, and the insurance trend of the public pension by age and gender for the last decade were examined. Main results are as follows. Women's labor force participation has slightly increased; however, career discontinuity remains and new family risks have increased. Second, women's public pension coverage as a percentage of the employment rate has substantially increased, implying that old labor market risks have largely been reduced for female workers. Third, the public pension insured rate among male workers has decreased to a small degree, which implies that new labor market risks are increasing for male workers. Consequently, the gender gap in risk has been reduced; however, policies established to deal with new risks have introduced some gender effects     

The work prospects of older employees: An international comparison

The labour markets in the European Community countries are faced with a massive change in the structural composition of employee age groups. This article examines the employment prospects for older persons in selected European countries. The first, introductory section gives a quantitative comparison of existing levels of employment of older persons. This group is defined on the basis of the Eurostat labour force statistics; it comprises those aged over 50 but under 65. The second section aims to give an overall picture of the different types of early pension and the different methods by which older employees were taken off the labour market in the past. In the 1970s and 1980s the countries of Europe took numerous measures to bring about early cessation of work and early pensions for older persons, in order to reduce the labour surplus at a time when unemployment was increasing. In future, however, employee age structures will develop on opposite lines (third section): demographic change will affect pensions policy financially (extending working life rather than pensioning workers off). The change in company employee age structures will begin in the 1990s. This new impending trend calls for longer-term adjustments in employment policies: these will be considered in the fourth, concluding section of the article.     

Labour Markets,Care Regimes and Foreign Care Worker Policies in East Asia

This article analyzes the politics of foreign care worker policies in Japan, Korea and Taiwan. In the face of socio‐demographic challenges, these countries have responded differently to the increasing demand for hiring foreign care workers, creating distinct policies with respect to the origins of the foreign care workforce, the size of the foreign care workforce in the labour market, and job specifications. In this article, I argue that the interaction of female employment patterns, the public provision (or lack) of social care, and labour market policies in the care service sector determines the diverging political pathways of foreign care worker policies in these three countries over the past two decades.     

Ethnicity and Occupational Pension Membership in the UK

Reflecting a relatively low‐value Basic State Pension, occupational pensions have historically been a key aspect of pension protection within Britain. Existing research shows that minority ethnic groups are less likely to benefit from such pensions and are more likely to face poverty in later life, as a result of the interaction of their labour market participation and pension membership patterns. However, the lack of adequate data on ethnic minorities has so far prevented the direct comparison of different ethnic groups, as well as their comparison to the White British group. Using data from the UK Household Longitudinal Study, this article explores patterns of employment and the odds ratios of membership in an employer's pension scheme among working‐age individuals from minority ethnic groups and the White British population, taking into account factors not used by previous research, such as one's migration history and sector of employment (public/private). The analysis provides new empirical evidence confirming that ethnicity remains a strong determinant of one's pension protection prospects through being in paid work, being an employee and working for an employer who offers a pension scheme. However, once an individual is working for an employer offering a pension scheme, the effect of ethnicity on that person's odds of being a member of that scheme reduces, except among Pakistani and Bangladeshi individuals for whom the differentials remain. The article also provides evidence on the pension protection of Polish individuals, a relatively ‘new’ minority group in the UK.     

Importing Workfare: Policy Transfer of Social and Labour Market Policies from the USA to Britain under New Labour

Britain's New Labour government has put welfare reform at the top of its political agenda. It has followed a radical “workfare” agenda in relation to labour and social market policies and no longer aims to secure full employment mainly through direct job creation or Keynesian demand management. Instead, it promotes equal opportunity for all based on a contract between benefits claimants and the employment service. The New Deal is at the heart of British activation programmes for the unemployed. American policy paradigms have influenced the design of the New Deal. Policy transfer in activation policies from the USA to Britain is due to institutional similarities in British and American welfare states on the one hand, and to the comparable structure of their labour markets on the other hand. The influence of the European social model on British labour market policies thus remains limited.     

To Retire or Not to Retire: Is There an Option for Older Workers in Hong Kong?

Over the next thirty years, Hong Kong will have a rapidly ageing population. One possible consequence of this will be a labour shortage, which means that it will be essential to strike a proper balance between the amount of time spent in work and the amount spent in retirement in old age. The balance is determined by the interaction between the aspiration of workers, employers’ attitudes to older workers, as well as the productivity of the labour force. In this article, we examine the issue based on life‐course theory and we argue that the compartmentalization of education, work and retirement must be broken by changes in social policy. We identify three groups of future older adults in the coming three decades: those who may be forced to retire early in their fifties, those who plan to retire in their sixties, and those who will continue to work until they can no longer work. The current situations of these groups are described, and social policies that are related to retirement pension scheme, age discrimination, life‐long education, and flexible work arrangements are suggested to weaken the age structuring of education and employment institutions. Our ultimate objective is to create a societal environment in which older workers have a real option either to work or to retire in the coming decades.     

Jobless or Working Poor in the Kyrgyz Labour Market: What Role for Social Policies?

This paper attempts to identify the multiple aspects of vulnerability in the Kyrgyz labour market. Particular attention is devoted to the working poor and precarious workers. This analysis is undertaken using the Kyrgyz Poverty Monitoring Survey, which is the only survey to date that allows a comprehensive analysis of poverty and labour market outcomes in the Kyrgyz Republic. The period under investigation covers the years 1997 to 1998, for which data are available. The results point to the extreme vulnerability of individuals with less education and women, who cumulated a high risk of being unemployed, of remaining longer in unemployment, of being discouraged unemployed and, if employed, of being low‐paid or working in precarious jobs. Other groups facing a high risk of exclusion, both from and within employment, were people with disabilities, individuals living in rural or depressed areas, young people and internal migrants. The multiple aspects of vulnerability in the Kyrgyz labour market, in particular the large overlap between work and poverty, have important implications for the design of effective social policies.     

Labour Force Participation,Social Inclusion and the Fair Work Act: Current and Carbon‐Constrained Contexts

The notion that employment is a precondition for personal wellbeing and social inclusion is almost sacrosanct in Australian culture. Yet, the working and living conditions of Australia's low paid workers tells a different story. While labour market participation is a cornerstone of the Federal Government's Social Inclusion Agenda, it is recognized that low pay and poor job quality often derail this key objective. Indeed, the difficulty of ‘making work pay’ at the bottom end of the labour market is a social inclusion challenge that has yet to receive the policy or public attention that it warrants. This article considers what the Fair Work Act means for the social inclusion of disadvantaged workers, in the context of wider‐ranging strategies to address low pay. It concludes with some considerations of the challenges that a carbon‐constrained economy is likely to present for labour force participation as a remedy for social exclusion.     

A qualitative comparative analysis of strategies for an ageing society, with special reference to pension and employment policies

The primary purpose of this study is to typify the respondent strategies of the OECD countries based on the interconnected structure of income and employment guarantees. More specifically, this article seeks to typify welfare policies into four types (welfare-to-work, welfare emphasis, labour emphasis, market emphasis) based on the leniency of the pension system and active state intervention in employment security. With the resultant four types, this article then places them as the dependent variable while incorporating per capita GDP, aged dependency ratio, pension maturity level, union density, constitutional structure index and degree of decommodification as causal variables. Through this process, this article aims to derive the decisive variable for each type through qualitative comparative analysis.     

The impact of population aging in rich countries: What’s the future?

The paper examines the impact of population ageing on macroeconomic outcomes, inflation and labour force participation employing a sample of 23 OECD developed countries from 1960 to 2014 and accounting for the institutional context. Controlling for collective bargaining coordination the results show that a larger elderly share of population would lead to lower real GDP growth, albeit mostly in countries with low population growth rates. Ageing puts substantial downward pressure on inflation due to subdued aggregate demand. Also, results demonstrate that the ageing of the workforce tends to reduce labour supply. To mitigate any adverse effects of population ageing, a combination of labour market policies, pension reforms, greater investment in human capital and technological innovation should be prioritized in policy making.     

Achieving fuller working lives: labour market and policy issues in the United Kingdom

In the United Kingdom there has been a shift away from policies promoting early retirement towards an emphasis on extended, fuller working lives. This article examines the nature of policy change in this area and prospects for individuals remaining in work longer. Pension ages for men and women are rising rapidly and by 2028 are likely to reach 67 years. Cash benefits for those out of work before state pension age are becoming harder to access and incentives for working beyond 65 are being enhanced. In this context, restrictions have been placed on the use of mandatory retirement ages by employers. Employees have also been granted the right to request flexible employment. However, a lack of coordinated policy up until now means that important challenges exist with regard to extending working lives. Ill‐health and low levels of qualifications limit the employment prospects of many older people, particularly among those in the poorest segments. Likewise, retention rates of older workers may have improved, but prospects for recruitment in older age remain poor. Policies focusing on the individual have also not yet recognised the extent to which employment in older age is influenced by the household and wider family context.     

Through the gender lens: a comparison of family policy in Sweden and China

In this study, Sweden and China's family policies, with a specific focus on their effect on gender equality, are compared. We describe the different goals and objectives of parental/maternity leave and childcare policies. The effect of family policies on gender equality, indicated by equal employment opportunities for women and the gender division of labour in the family in the two countries, is also discussed. A systematic comparison revealed that both countries included the promotion of gender equality in their policy agendas, but they varied in design and implementation. Swedish family policies assume childcare is a public concern, and women's participation in the labour market and men's involvement in childcare are considered to be crucial to achieving gender equality. In contrast, China's family policies emphasize women's participation in the labour market, but overlook the gender division of household work and childcare at home.     

Thank God you're here: the coming generation and their role in future‐proofing Australia from the challenges of population ageing

Like much of the industrialised world, Australia's population is ageing, the implications of which are twofold: increasing demand for publicly funded services and a decline in the supply of prime working‐age people. In grappling with the challenges of a diminishing workforce, the Australian Government is currently relying on its migration programs to provide both the much‐needed labour and skills for the resource boom and also to stimulate the economy through population growth. However, there may be another, not yet fully considered solution to the upcoming demographic problem. This paper investigates how the grandchildren of the baby boomers, termed here the Thank God You're Here generation (Gen TGYH), might impact on Australia's predicted workforce shortage. This generation of workers will enter the labour force as the last of the baby boomers reach retirement age, and will not only be bigger in size than preceding generations (Y, X and Baby Boomers), but also potentially be better educated than the retiring generation. This paper will also canvas the opportunities for both Gen TGYH and employers as well as the challenges for policymakers and governments in maximising the opportunity provided by this generation in the Australian economy.     

Employers and the Management of Retirement

In the UK early withdrawal from the labour market is seen as a risk and a cost, worsening the dependency ratio, raising public and private pension costs and threatening additional welfare expenditure over the longer term. Explanations of the retirement process have focused on the welfare state and the impact of pensions and other social security policies. This paper argues that a missing actor in these accounts is the employing organization. Early retirement in the UK has been predominantly driven by the labour requirements of employers rather than state policies to encourage older workers to take early retirement. There is a case for arguing that significant change in retirement behaviour in the UK will come primarily from the modification of employers’ policies. This research is a case study of three employers: one public‐sector and two commercial. It examines the dynamics of the retirement decision. This paper reports the public‐sector case. The findings indicate that employers, in order to reduce their pensions liabilities and stem the cost of early retirement, are trying to regain control of the retirement process. The employees interviewed felt they experienced little choice concerning their retirement, had limited knowledge of the options open to them and found pensions complicated and confusing.     

Evaluating social investment in disability policy

Disability policy in European countries is displaying a shift towards social investment: increasing human capital and access to the labour market. The reasoning that underlies this transition is that disabled persons would benefit from mainstream employment, but are impeded in traditional policy by deficiencies in labour supply and demand. However, the shift towards more activating policies in many countries is accompanied by a decline in social protection. It is unclear whether social investment may effectively promote the employment chances of disabled persons within this context. The present research examines this question through a quantitative, cross-sectional, multilevel analysis on microdata from 22 EU countries. Our findings suggest greater activation to predict lower employment chances, while reducing passive support shows mixed effects. Conversely, measures for facilitation in daily life predict greater employment chances, as do measures for sheltered work. These findings raise questions over the value of social investment for disabled persons—and underline the need to overcome broader barriers in the labour market and in society.     

Older people, work and equal opportunity

People in industrialized countries are living longer, having fewer children and retiring sooner. The proportion of older people in the population is rising; their labour force participation is declining. These trends are arousing apprehensions about future labour supply and pension financing as contributor/beneficiary ratios decrease. A widely advocated policy response is to seek higher participation rates, especially by raising pensionable ages and restricting early retirement. Little has been done to improve the labour market position of seniors. Three-pronged action is needed: promoting training, placement and workplace flexibility; changing attitudes through education and information; and prohibiting age discrimination in employment.     

Keeping Australia's Older Workers in the Labour Force. A Policy Perspective

As in other western industrialised countries the structural ageing of the Australian population has significant labour market implications. Government has responded with a range of policies to persuade older workers to abandon early retirement and/or remain in the workforce past traditional retirement ages. But whether this generation of workers will be prepared to change their retirement plans in response to policy encouragement, and whether current policy measures will translate into significant numbers of older workers extending their labour force participation is uncertain. Using the Australian Survey of Retirement Attitudes and Motivations (ASRAM) a recently completed, nationally representative survey of Australian workers aged 40 – 59 years we find that while the Government message about working longer is getting through, older workers are relatively unresponsive to current policy measures. Other policies, especially policies outside the financial realm, are needed to maximise the number of older Australians in the labour force.     

Promoting a higher retirement age: A prospect‐theoretical approach

Demographic ageing and the necessity of raising the retirement age is one of the most frequently debated topics among European welfare policy experts. This study used prospect theory as developed in behavioural economics to explain public attitudes towards pension reforms. It argues that, in line with prospect theory, negative incentives are more useful in changing people's attitudes in favour of a higher statutory retirement age than are positive incentives. Therefore, in the case of increasing life expectancy, defined‐contribution schemes that apply actuarial formulae linking the level of starting monthly pension benefits to life expectancy are more useful in promoting a higher retirement age than conventional defined‐benefit schemes, which typically do not forge an automatic connection between longevity and starting pensions. The implications of prospect theory for attitudes towards pension reforms were tested using Eurobarometer survey data collected in 2004 and 2009 in the Czech Republic, Poland and Slovakia.     

Gender inequalities in European unemployment benefit systems

The most important structural change which has occurred on the labour market over the past 30 years is the sustained and continued growth of female labour supply. Two-earner couples have become a majority in most European countries and lone parents, mostly women, are also on the rise. On the other hand, since 1975, labour market policies have altered the quality and nature of employment in Europe by promoting atypical forms of employment where women are overrepresented. The analysis has shown us that atypical employment results in restricted access to unemployment benefits. Moreover, combining the presence of more stringent conditions with derived rights results in more and more women being dependent upon their spouses for financial as well as social protection and can even have a disincentive effect on formal labour market participation.