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Ageing and Labour Market Participation

Page history last edited by Ciarán Holahan 16 years ago

The Equality Authority/ESRI - Helen Russell and Tony Fahey - January 2004


The proportion of people aged 50-69 years in employment rose during the 1990s, thus reversing a long-term downward trend.The purpose of the present study was to examine the components of this upward movement, in the context especially of an interest in the role of public policy in shaping the labour market behaviour of older people. Differences in labour market behaviour by gender and between the Border, Midland and Western region and the Southern and Eastern region were also a concern.


Key Findings

  • The rise in older people’s employment rates during the 1990s was driven less by a delay in retirement than by an increase in the movement of the formerly non-employed into jobs.This increase was mostly due to women entering jobs from home duties but men entering from unemployment also played a substantial role. Even though older men’s employment rates rose slightly in the second half of the 1990s, the proportion that were retired also rose slightly, so that in their case it was possible for employment rates and retirement rates to rise at the same time.


  • It was only among the self-employed, and especially among farmers, that there was a notable tendency to work beyond age 65.This aspect of older people’s working patterns also gave rise  to one of the few marked regional differences observed in the study, namely, the higher incidence of self-employment in the Border, Midland and Western region compared to the Southern and Eastern region. 


  • Ill-health played an important role as a cause of non-employment among older people, not only among those who reported their main economic status as ‘unable to work due to sickness or disability’ but also among the unemployed and those who retired early. Those who classify themselves as unemployed or ill/disabled have much lower levels of psychological well-being and are much more dissatisfied with their situation than the retired and those in home duties.This strongly suggests that unemployment and being unable to work due to sickness or disability are not functional equivalents of early retirement. These are qualitatively different situations and represent much more negative exits from the labour market for older workers.


  • The significance of not being employed, or of exiting from employment into non-employment, varied greatly according to the type of non-employment entered. Generally speaking, retirement and home duties were experienced positively, even though they often entailed a lower level of income than could be obtained by entering into or staying in employment. Unemployment and being unable to work due to sickness or disability, by contrast, were experienced as overwhelmingly negative by people in those situations. While overall rates of exit from employment do not differ greatly by social class, the destination of exit does, as those in higher level occupations are more likely to exit to retirement or, in the case of women, home duties, while those in manual occupations have a higher risk of exiting to unemployment than other social classes.


  • The likelihood of entering jobs for older people is highest among those with third-level education, yet because few older people have third-level education, most of those entering jobs have only primary or lower second-level education (71%). Reflecting the latter finding, a high proportion of older persons moving from non-employment to employment enter the occupations of service, shop and sales workers (22%), and elementary occupations (28%).  The likelihood of entering employment is also strongly influenced by length of time out of employment, particularly in that those who have been out for less than two years have a stronger chance of going back to employment than those who have been out for longer periods. Having good health and having a partner in a job are also positive influences.


  • The most general benefit experienced by people who entered jobs from non-employment was a rise in income and a consequent decline in risk of poverty. Men also gained a boost to psychological well-being, as they typically exited unemployment when they entered jobs.  Women, by contrast, generally suffered some psychological stress from entering jobs, despite the income boost they obtained, indicating that the transition to employment is of a qualitatively different kind in their case.


Policy Implications

  • From the point of view of the welfare of older people, the key problematic aspects of labour market patterns occur in connection with unemployment and being unable to work due to sickness or disability rather than with retirement or being in home duties. To improve the circumstances of older people, therefore, it is necessary for policy to pay particular attention to the problems of older unemployed workers and those who are ill/disabled.


  • Health policy has a major role to play in this area alongside labour market policy. Ill health or physical impairment are not only central to the problems of those who report their economic status as unable to work due to illness or disability but are also a common problem among the older unemployed. Equality policy can also play a role here, since discrimination related to disability and gender may amount to a significant influence both on exits from employment and inability to re-enter employment among some categories of older workers. Older workers can also of course be discriminated against on other grounds (for example membership of the Traveller community, sexual orientation and ethnicity) and equality legislation needs to take into account the specific situation, experience and identity within that group. However, given data limitations, such issues are beyond the remit of this particular study.


  • Older people enter work as well as leave it, and while entry into jobs has many important positive effects, it can be a stressful transition for older women who take up jobs. Such stress needs to be taken account of in active labour market policies for older people.


  • As older people are now being encouraged to remain in or return to the workforce, largely due to economic factors, public policy needs to promote flexible pension arrangements, enhanced employer practices and arrangements and an emphasis on work-life balance that takes into account social and human factors. It has long been recognised that the abrupt ending of working life is not the best approach to retirement and research has revealed that the majority of working older people would like gradual retirement. Therefore promoting the option to retire in a phased way and ensuring older people have access to the labour market on the same basis as other adults are significant policy issues.


  • The period examined in the present study was one of exceptional growth in the labour force in Ireland and of high levels of labour demand for all age groups. It is unclear how the slowdown in growth which has emerged since 2002 will alter the patterns observed in the preceding high-growth period. On the one hand, it is likely to hamper opportunities for movement into paid work among older people which were so characteristic of the 1990s. On the other hand, the high level of inactivity found among people in their 50s a decade ago has been lowered since then and leaves the pool of people likely to be interested in such movement considerably smaller. Competition for jobs among older workers may thus be reduced.The net effect of these changes on patterns of labour force participation among older people is difficult to predict.

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