In many countries population ageing has led to calls for a re-examination of retirement and labour-force participation by older people. This paper asks whether work in later life constitutes a threat or an opportunity--for the workers themselves, for their employers and for society as a whole. Comparisons are made between New Zealand and the United Kingdom, in terms of the policy environment and trends of labour-force participation for men and women aged 50 and over. Individual perspectives, the point of view of employers and factors at the macro level are examined. Through examining the factors that influence decisions about work in later life, the paper suggests measures that can be taken by employers and by governments to turn potential threats into opportunities.
We are living in an ageing world (Kinsella and Velkoff 2001). The United Nations sees population ageing as unprecedented, pervasive (affecting both developed and developing countries) and profound (having major consequences for all aspects and facets of human life). It is also enduring (United Nations 2002). The balance between young and old is changing, and this is reflected in the age dependency ratio (i.e. the ratio of the number of people of "retirement age" relative to those of "working age"). In New Zealand in 2000 there were 18 people aged 65 and older per 100 people aged 15 to 64. This figure is expected to more than double to 43 per 100 by 2040 (Statistics New Zealand 2000). In the United Kingdom, the comparable figures are 27 and 49 (Government Actuary figures, using the ratio of people 65 and older to 100 aged 20-64). As this ratio increases, concern grows about how a larger older population will be supported, both in terms of income and also health and other services.
In many countries there are doubts about the sustainability of retirement income provision, in both the public and private spheres. The fiscal "burden" of public provision is of concern to many governments. In New Zealand, the cost of retirement income support is now 4% of GDP and is expected to rise to 9% in the next few decades. In the United Kingdom, the comparable levels are higher at present, at just over 9%, and are expected to increase to 10.8% by 2050 (according to estimates by the Pensions Commission in 2004). Occupational schemes have been threatened by downturns in financial markets, which have also affected personal savings. These effects are magnified because, through increased life expectancy, workers spend a higher proportion of years in retirement relative to the number of years in paid work. Many global companies now have more "pensioners" than workers.
The demographic trends of lower fertility and longer lives, coupled with the advance of the "baby boom" generation through mid-life, with the early "boomers" reaching their mid-sixties from about 2010, are leading to higher levels of age dependency. In addition to this, technological advances are occurring with ever-increasing speed, particularly in communications. In some circumstances, this means that productivity is increased, with fewer people required to do the same amount of work. However, it can also lead to the creation of new jobs and demand for workers.
In light of these changes, it is not surprising that our understandings and expectations of working lives, retirement and work exit are being re-examined and that these issues have become prominent on the policy agendas in many countries and in organisations like the OECD (Burniaux et al. 2004, Watson Wyatt Worldwide 2004). Moves to enhance labour force participation by older people have potential advantages for the workers themselves, for their employers and for society as a whole.
The position taken in this paper is that countries such as the United Kingdom and New Zealand need to consider how labour-force participation among older people, aged 50 to 65, or even beyond this age, can be intensified and extended. We then ask whether work in later life constitutes a threat or an opportunity--for individuals/workers, for employers and for the economy and society as a whole.
POLICIES ON OLDER WORKERS IN THE UNITED KINGDOM AND NEW ZEALAND
In the United Kingdom, concern about the implications of population ageing is high. A Pensions Commission has been set up to consider the retirement income situation. Its first report (Pensions Commission 2004) concluded that unless it is accepted that pensioners will become considerably poorer relative to the rest of society, either taxes and National Insurance contributions (1) must rise; or savings must rise; or average retirement ages must rise. Calculations in the report suggest that all three must occur in order to maintain adequate pensions. In 2006 the United Kingdom will introduce anti-age-discrimination legislation. In its Age Positive programme (www.agepositive. gov.uk), the Department for Work and Pensions has several initiatives, which Include removing previous incentives to early retirement and raising awareness of the issues among employers. One such Initiative is the Age Partnership Group, which launched its Be Ready campaign in 2005, targeting employers.
In New Zealand, less attention has been given to older workers. Instead, there have been calls for higher rates of labour force participation among welfare beneficiaries and younger women, especially mothers. (2) Nevertheless, policies have influenced older workers, especially the raising of the age of eligibility for New Zealand Superannuation from 60 to 65 during the 1990s, which had a clear effect on labour-force participation rates for people in this age range. The abolition of compulsory retirement under the Human Rights Act 1993 has been another incentive for people to remain in paid work.
WORK IN LATER LIFE--TRENDS IN THE UNITED KINGDOM AND NEW ZEALAND
In New Zealand, there has been an upturn in labour-force participation rates for both men and women in middle and later life, especially in the 60-64 age group, related to the increase in the age of eligibility for New Zealand Superannuation (Table 1). Increases in the 55-59 and 65-plus age groups have been less dramatic, but significant for women aged 55-59, rising from 59% in 1999 to 68% in 2004, and for men aged 65 and older, with a rise from 9% to 15% over the same period. In the United Kingdom, the proportion of males aged 55-64 in the labour force fell from 80% in 1979 to 70% in 2002 (Humphreys et al. 2003), but it has since recovered (Table 2). As in New Zealand, the proportion of older British women in the labour force continues to grow. The age group quoted in British data is 50-59 (as 60 is the state pension age for women and 65 for men). The proportion of both men and women aged 50-59 has risen since 1999 (Table 2). Beyond state pension age, participation levels are low in both …