Living longer, working longer: the need for a comprehensive approach to labour market reform in response to demographic changes.

Abstract

Increases in life expectancy over the last decades have been among the most salient reflections of changes in the quality of life in the developed world. In Germany, in 1990, the average life expectancy for men and women was, respectively, 72 and 79, while in Italy men could expect to live 74 years and women 80. By 2012, these numbers changed by about 6 years for men and 4 years for women in Germany and by 6 and 5 years in Italy. Substantial increases in life expectancy have been recorded in all EU countries, from Portugal to Estonia and from Cyprus to Norway. This growth reflects unequivocal success of medicine and health care provision and fundamental changes in the quality of life and lifestyle, and offers new opportunities for the growing groups of older populations. However, when set against very low birth rates and low levels of economic growth, the increases have also called into question the financial sustainability of social security and public health care systems, and the potential generosity of welfare support for large groups of the population. It has long been recognised that increases in life expectancy, and the slower but equally important growth of healthy life expectancy, must be matched by adaptations of eligibility for public retirement pensions and by extended labour market activity. Continued economic development requires that increased proportions of the 50, 60 and 70 year olds be involved in the labour market, and that living longer be accompanied by working longer. There seems to be broad agreement that the process of extending working lives needs to involve all of the key stakeholders, i.e. both workers and their employers with an important supportive role of the government in areas of potential market failures. It also requires a comprehensive approach that combines labour market and retirement policies with tax policy and public health and welfare reforms. The demographic changes that are occurring before our very eyes offer new opportunities for older individuals, insofar as many of them continue to enjoy healthy and active lives. At the same time these changes also present substantial challenges for many individuals who find themselves faced with new requirements at the workplace and difficult choices concerning care duties for older family members or support expectations among younger generations. It seems clear that as the proportion of the 50? in the population grows, it becomes ever more important to understand the mechanisms which affect the quality of life of these groups of the population and which drive individual decisions in different areas of life, including activity in the labour market. Fortunately, as new survey and administrative data on older populations become available at national and international levels, researchers can examine the causes behind observed variation in different outcomes and they can address increasing number of key questions of academic and policy relevance. The labour market activity of older people is the focus of the special section in this issue of the European Journal of Ageing, with each of the four articles in the section making its contribution to the current debate on increasing working lives. As argued by Sonnet et al. (2014), for example, this debate, apart from reforming retirement systems, has to address such areas as rewarding work, changing employer practises and improving employability of workers. The four papers in the special section fit well within this framework. Dal Bianco et al. (2014) and Achdut et al. (2014) examine different factors behind retirement Responsible editor: H. Litwin.