Life expectancy is increasing, but so are social divides

An ageing population will radically change the ratio of working adults to older people, with women and the poor worse off
Women generally live longer
Women are under-represented in the workforce but are also living longer, which will probably increase disadvantage. Photograph: Frances Roberts/Alamy

Increased longevity with better health and wellbeing is a 21st-century phenomenon to be celebrated. But statisticians and demographers find it difficult to model the needs of an ageing population and its impact on workplace demography and diversity. We may be able to predict averages – lifespan, health, income – but we have inadequate knowledge of the distributed effects of ageing.

Within a very short space of time men and women in the EU have added 10-15 years to their life expectancy. By 2025, about a third of Europe's population will be aged 60 or over. This, together with the financial impact of the recession and the process of globalisation, leaves us at a tipping point where the effects of economic inactivity by older workers could be economically catastrophic.

As noted in a 2006 OECD briefing, if there is no change in work and retirement patterns, the number of older inactive persons in OECD countries will almost double from around 38% in 2000 to just over 70% in 2050. For EU member states, the ratio could rise to almost one older, economically inactive person for every worker over the same period. Certain demographic groups such as women and individuals from low socio-economic status may be over-represented as older, economically inactive persons, and changes to pensions, job design and lifelong learning could militate this inequality.

Lásló Andor, employment, social affairs and inclusion commissioner for the European Commission, has said thatall levels of government, social business and civil society should adapt, to remodelsociety with an older population.

"Commitments can range from legislative reform (like removing obstacles that prevent older people from staying in employment); or analysis and public debate to raise awareness or identify specific priorities for action."

Longevity should be a social and economic asset to society, and EU member states need to share ownership of the issue. Two major strategic interventions will significantly shape future behaviour of older workers: changes in statutory retirement ages and to pensions.

Increases in statutory retirement ages begin to address part of the problem, but it is impossible to gauge at this stage whether this will result in a corresponding change of actual retirement patterns. In Germany, recent changes in retirement benefits seemed to directly correlate with changes in individuals' behaviour, but in other countries, such as Finland, which introduced partial retirement rules, reforms backfired. We need, therefore, to understand the psychology behind people's decision-making processes around pensions and retirement and how this is shaped by gender and socio-economic status (SES).

Eurostat figures suggest that the number of people aged 55 to 64 will increase by 14 million between 2005 and 2030 while the total of working age population (15-64) will fall by 20 million. A key target of the Lisbon Strategy, aimed at making the EU the most competitive economy in the world, was to increase labour market participation of workers aged 55-64 to 50% by 2010. Figures in 2011 reveal that while there was progress, the target was only partially met – with 41% of men and 59% of women in this age group still inactive. Without significant strategic intervention this trend with probably continue to increase.

We also urgently need to explore the options and make recommendations for pension systems (involving both public and private sector agencies) that balance rights and obligations during work, with benefits in retirement; and recognise the needs, not just of those with higher income and better education, but also of those with small pensions or who are reliant on state support.

Pension information that is transparent and accessible to all individuals so that they can plan for their retirement and be fully informed as to the likely pension they will receive is urgently required. Individuals should be able to personalise and develop various scenarios so that they can see and assess the likely impact of, for example, working longer and/or taking training opportunities; the impact of health and lifestyle choices; career breaks for carer duties, and phased retirement on their future pension provision.

We know that women, throughout life are under-represented in the workforce. While recent statistics suggest that this gap is narrowing, the impact of this disparity, coupled with gender inequality in pay, lower pension contributions, increases in divorce (and therefore more women entering older age living on their own) and the fact that women generally live longer could increase the already disadvantaged position of women. It is not enough to suggest that we simply encourage more women to stay in the workforce longer while women are reported to suffer age discrimination at a younger age than men.

Lower SES individuals are, by definition, more likely to be unemployed or hold blue collar worker positions. Individuals from higher SES groups tend to be healthier, work longer and have better education. Hence we are aware that, despite the laudability of the goal, increased longevity may serve to increase existing disparities..

Improving the health and wellbeing of all, particularly targeting those from lower socio-economic backgrounds (where poor health and disability represents a significant barrier to inclusion in the workplace) should enable individuals to be more willing and able to extend their working lives.

The EU directive on equal treatment in employment and occupation compels member states to consider how older people are treated, but policies and practices must be applicable to all workers regardless of gender and socio-economic status. The Nesta Act 50:50 project provides a toolkit to encourage nurses and other health workers to consider alternative working options following retirement from the NHS in the UK. Many of the issues relating to women from low SES groups will, however, need to be addressed much earlier than when they reach retirement age.

Christine Broughan is co-director of the Age Research Centre at the University of Coventry. This is an edited version of the paper she presented at the world congress of the International Federation of Scholarly Associations of Management.


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