OECD Policy Recommendations on Extending Working Lives

Authors: Áine Ní Léime,
Series: Issue: 08 2019

This Working Paper presents an overview of the OECD’s approach to extended working life, in relation to pensions and employment policy. It briefly outlines the role of the OECD and traces the evolution of OECD policy recommendations on extended working life from 2005 onwards to 2018. It discusses how the OECD recommends policies targeted at governments in terms of pension reforms including raising state pension age and linking pension amounts more closely to earnings, and anti-discrimination legislation; at employers and at improving the employability of older workers. The series of publications Pensions at a Glance, published biennially from 2005 to 2017 contains very little explicit reference to gender inequalities in pensions or indeed to women, apart from some references to family responsibilities. The 2015 report included a chapter on how incomplete careers affect pension entitlements. The critique of the OECD’s approach from a gender perspective in the academic literature is discussed. It is recommended that the OECD conduct gender-proofing to assess the implications of extended working life policy (OECD, 2017b).

COUNTRY REPORT: Czech Republic

Policies aimed at extending working lives (EWL) have only been introduced in the Czech Republic over the last 15 years. This report first describes the situation of the 50+ age group in the Czech labour market. In the second part, it maps retirement, employment, pension and other relevant policies in the Czech Republic as well as policy documents supporting active ageing. In conclusion, the authors suggest that the real or potential impact of EWL policies on the situation of women and men aged 50+ should be approached from an intersectional gender and age perspective.

COUNTRY REPORT: United Kingdom

In recent decades, the extension of working life has become a priority for policy makers in the UK. An ageing population, combined with steady increases in life expectancy, have led to a dramatic growth in the proportion of adults above State Pension age, alongside a shrinkage in the number of working-age adults. This has led to government concerns regarding not only the cost of funding State Pensions, but also the skills shortages that have resulted from the loss of older adults from the labour market via retirement. Successive UK governments have implemented a range of measures designed to encourage individuals to continue in paid work for longer. The tone of policy discourse has shifted towards the individual, with a growing emphasis on the need for individual workers to take responsibility for financial planning for their own retirement.

In this report, we consider and discuss extended working life (EWL) policies in light of current academic research. We start by presenting statistical data on UK employment rates, in order to outline the trends in age, gender and employment in recent decades. We then discuss six policy areas related to extending working life. First, we compare women and men’s participation in the labour market over the life-course. Second, policy changes related to age are discussed, including age discrimination legislation and changes to State Pension age. Third, we consider changes to social security benefits. Fourth, we provide an overview of the UK pensions system, including recent changes to the system, the introduction of occupational pensions and auto-enrolment, and opportunities for combining pensions and working. Fifth, we discuss policies related to family and caring (including grandparents’ leave). Sixth, we consider flexible work policies in the context of later-life working. The report concludes with a discussion on the potential gaps in research on extending working lives in the UK national context.

Robust Cross-country Analysis of Inequality of Opportunity

International rankings of countries based on inequality of opportunity indices may not be robust vis-à-vis the specific metric adopted to measure opportunities. Indices often aggregate relevant information and neglect to control for normatively irrelevant distributional factors. This paper shows that gap curves can be estimated from crosssectional data and adopted to test hypotheses about robust cross-country comparisons of (in)equality of opportunity.

COUNTRY REPORT: Ireland

Abstract

This paper presents a discussion of the gender and health impacts of extended working life policies in Ireland. It gives an overview of gendered working patterns in Ireland, focusing particularly on older workers and giving an outline of some of the historical policies that affected women earlier in their working lives, adopting a lifecourse approach in order to account for gender pension and unemployment inequalities. This is followed by an overview of the pension system in Ireland and of gendered patterns and level of coverage. This is followed by a discussion of the policies that have been introduced to extend working life and related pension reforms including health related employment measures and family friendly policies and the gendered division of care labour. There is a brief synopsis of the media debate in Ireland on extended working life policies and pension reforms particularly those related to gender. There is a discussion of the policy and academic literature in gender and extended working life including that on health and precarious employment.

COUNTRY REPORT: Switzerland

Authors: Nicky Le Feuvre,
Series: Issue: 03 2019

Abstract

The DAISIE project explores the gendered impacts of policies and practices aimed at extending working life (EWL) in five contrasting national settings (the Czech Republic, Ireland, Sweden, Switzerland and the UK), using a mixed methods research design inspired by insights from life-course and gender studies. The project addresses two significant and timely issues: labour market participation in later life and the influence of labour market and family trajectories on the experiences of older workers in different national and occupational contexts.

This report explores the issue of extending working life in the Swiss context. It begins by mapping the employment patterns of older workers (50+), insisting on the differences in employment histories, working conditions and the transition to retirement that are associated with the normative expectations of the dominant “modified male breadwinner” Swiss gender model. The report then goes on to present the three-tier Swiss pension regime and to analyse the consequences of recent – or proposed – policy reforms to this system. It insists on the huge gender pension gap in the Swiss context and analyses the consequences of this for older workers from different social backgrounds. The report concludes by summing up the important features of the EWL debate in Switzerland from a gender perspective and identifying gaps in the current state of research on this topic.

The Lost Ones: The Opportunities and Outcomes of Non-College-Educated Americans Born in the 1960s

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Long-term changes in married couples’ labor supply and taxes: Evidence from the US and Europe since the 1980s

Read moreLong-term changes in married couples’ labor supply and taxes: Evidence from the US and Europe since the 1980s

Trajectories of Life Satisfaction Before, Upon, and After Divorce: Evidence From a New Matching Approach

The new DIAL working paper by Scheppingen and Leopold Trajectories of Life Satisfaction Before, Upon, and After Divorce: Evidence from a New Matching Approach analyses how divorce influences life satisfaction. The results indicate that life satisfaction declines among divorcees, and that some declines last at least five years after the divorce.

Van Scheppingen and Leopold analyse trajectories of life satisfaction with data from the longitudinal German Socio-Economic Panel Study. They match individuals who experience a divorce with individuals as similar to them as possible but who do not experience a divorce. By comparing these two groups, the authors can take into account other marriage-related factors that influence life satisfaction as well as the general decline in life satisfaction that tends to take place after marriage.

The results show that life satisfaction indeed declines more among divorcees than individuals who remain married. This relative decline starts years before divorce and is most pronounced at the time of the divorce. Life satisfaction rises again after divorce but remains at lower levels as compared to married individuals. The change in life satisfaction is not the same among all divorcees, indicating that some show full recovery, as others remain at lower levels of life satisfaction until years after the divorce.

Read moreTrajectories of Life Satisfaction Before, Upon, and After Divorce: Evidence From a New Matching Approach

Divorce and the Growth of Poverty Gaps Over the Life Course: A Risk and Vulnerability Approach

A new paper by Hogendoorn, Leopold and Bol, Divorce and the Growth of Poverty Gaps Over the Life Course: A Risk and Vulnerability Approach, published in the DIAL working paper series, examines educational gradients in the relationship between divorce and poverty. The authors take a new approach to studying growing poverty gaps between education groups by combining theoretical aspects of gradients in the probability of divorce (risk) and gradients in how divorce influences poverty (vulnerability). Previous studies have demonstrated that the lower educated have both a higher risk of divorce, and have suggested they also have a higher probability to suffer from the negative consequences of divorce. However, by studying risk and vulnerability separately, previous research has not fully assessed their joint contributions to poverty.

Hogendoorn and colleagues study the educational gradients in divorce and poverty using longitudinal administrative data from the Netherlands. They confirm that the lower educated indeed have the highest risk of divorce and the highest probability to fall into poverty after divorce. These gradients also strengthen over the life course, which means that the contributions of divorce to poverty among lower educated men and women increase as they age. However, the contributions of divorce to poverty differ by gender and parenthood, for example mothers seem to be particularly likely to fall into poverty after divorce than any other group.

One of the main contributions of the paper is the two-fold approach of risk and vulnerability of divorce and how they have contributed to the increased poverty gaps between education groups. Hogendoorn and colleagues illustrate that especially among mothers, both risk and vulnerability of divorce contribute significantly to the educational gradient in poverty. The phenomenon is less substantial among childless individuals and absent among fathers.