And for many reasons other than financial hardshipby Norma Cohen / April 5, 2017 / Leave a comment
©Kirsty O’Connor/PA Wire/PA Images Recent news that the ranks of older women in the workforce are swelling may come as a surprise. But as pensions provider Hargreaves Lansdown points out, official data shows out that the percentage of working women over the age of 70 has doubled within the past four years. Given the outcry over moves to raise the state pension age (SPA) for women, these figures might be interpreted as a response to financial hardship. However, experts on labour and retirement dismiss this reading. “It’s fantastic news,” said Baroness Ros Altmann, an independent expert and former pensions minister. “It means women have better health, better wealth and will be contributing to Britain’s economic growth.” Indeed, rising longevity is forcing governments in developed economies to reshape their pension systems, in part by raising the age at which workers can make a claim on the state. In Britain, men and women’s SPAs are to rise to 66 by 2020 and then 67 by 2028, and the so-called default retirement age, which allowed employers to make staff redundant at 65, has been scrapped. Hargreaves Lansdown found that the percentage of women working past 70 had roughly doubled, from 5.6 per cent in 2012 to 11.7 per cent in 2016. However, the firm did use two different data sets to reach its conclusion, one measuring the percentage of women withdrawing from the workforce at specific ages and the other measuring the percentage of women of specific ages participating in the workforce. Nevertheless, even if one quibbles with the absolute levels, the overall trend is clear. Structural changes in Britain’s economy—the decline of strength-based manufacturing jobs in favour of skills-based service industry jobs—along with the rise in the percentage of unmarried women and declining fertility, are frequently listed as factors that keep women at work. Even before rising SPAs took effect, more older women were at work. Data up until 2012 show that among women aged 50 to SPA, 71 per cent were at work, up from 59.2 per cent in 1992. Beyond SPA in 2012, some 12 per cent were at work, up from just 8 per cent in 1992. One factor boosting women’s employment may be the number of university graduates, which has been growing sharply, with women outnumbering men. As of the end of 2015, roughly a quarter of the total UK workforce that was beyond SPA had a university degree, the single largest category by skills level. In contrast, of those who had fully retired, only 14 per cent had university degrees and those with no qualifications were the single largest group. Bernard Casey, a professor of labour economics at Warwick University, notes that the effect of education on post-retirement age employment mimics “the wine glass effect,” in which the concentration of alcohol in a glass of wine is lowest at its centre. That is, employment among those in this age group tends to be concentrated at the highest skills levels and at the lowest. Those with highest skills are likely those who want to go on working, while those with the lowest may be working from necessity. But the same factors that are making it easier for women to work past retirement age are also keeping men on the job longer. “Post crisis, many employers were reluctant to hire new people and incur the costs of training and recruiting,” Casey said. A cheaper and more flexible option is to encourage staff who were near retirement age to stay at work, perhaps at reduced hours or pay. In fact, workforce participation rates past SPA are even higher for men than for women as a result of this caution among businesses. Some of this is mirrored in the rapidly rising numbers of the self-employed, he added. Meanwhile, these trends aren’t limited to Britain. A University of Michigan study found that even though Americans employed beyond retirement age were most likely to be working in the field for which they were trained, they were also more likely doing so in a job with lower status and pay but more flexibility in hours. “Occupational changes later in life tend to be accompanied by decreases in hourly earnings, suggesting that if workers are seeking flexible or part-time bridge employment, it may come at a cost,” the researchers concluded.