Sweden: Looking at Retirement Age and Proposals to Strengthening Labor Participation by Older Workers

SeniorPolittik.no is running a series of articles on Sweden and retirement. According to the lead story, even though, under Swedish law, an individual has no right to remain in employment after age 67, and Swedes have the right to withdraw retirement pension as early as age 61, among both employers and employees it is a deeply rooted belief that the earlier retirement age of 65, the normal retirement age.

Swedes work longer than workers in many other countries, such as Denmark and Finland. However, labor force participation among Swedes aged 65 and older is generally not as high as in for example Norway. Labour force participation among older Swedish women, however, higher than in Norway. Nevertheless, politicians are worried and stressing among other things, that Norway has been more successful in changing attitudes away from a fixed retirement age.

Drawing on a report prepared for the Swedish parliament earlier in 2014, it is apparent that negative attitudes towards older workers is common. The report notes that Norway's creation of a center for senior policy is a cause of the attitudes in Norway being less negative, and it concluded that it is not enough just to raise the retirement age to change the perception of older workers. Information and knowledge are also needed.

While the Swedish report notes that "everyone can not work indefinitely, but many are able to work with and much longer than is the case now," there are proposals to raise the statutory right to continue in employment to 69. In addition, a year ago, proposals were submitted o the government to raise the age for the earliest opportunity to receive a pension from the government gradually from 61 years, on the grounds that life expectancy is projected to increase.

Sources: SeniorPolittik.no, Retirement Age in Sweden: "Mener Norge har lyktes bedre" [Believe Norway has succeeded better], "Fant sin egen vei videre" [Found their own way forward], "Bør være en menneskerett å få arbeide" [Should be a human right to work] (June 2014);

Survey: Workers More Optimistic about Retirement, but More Contemplating Phased Retirement

The Transamerica Center for Retirement Studies® has released the results of its annual retirement survey, which found increased optimism among workers around the world about improvements in their local economies, but also noted that many workers envision some kind of phased transition into retirement. According to "The Changing Face of Retirement—The Aegon Retirement Readiness Survey (2014)," just 32% of workers surveyed plan to immediately stop working and fully retire. In the United States, this number is just 24%, while in European nations, which which have histories of compulsory retirement, workers are more likely to plan to stop immediately: for example, , 52% in Spain and 51% in France.

Employment and government policy reforms are needed to facilitate this new approach to retirement, yet change is not catching up with worker demand: only 23 percent of workers say their employers facilitate transitioning from full-time to part-time. Even fewer U.S. workers (21 percent) indicate their workplace policies accommodate the transition. In many cases, change in labor and pension laws, as well as a change in cultural norms, are needed to facilitate implementation of a phased retirement program.

The Aegon Retirement Readiness Survey 2014 is a collaboration between the Transamerica Center for Retirement Studies and Aegon. The survey encompasses 16,000 employees and retirees in 15 countries, with separate country reports available for each of them: Brazil, Canada, China, France, Germany, Hungary, India, Japan, the Netherlands, Poland, Spain, Sweden, Turkey, the United Kingdom and the United States. These countries were selected on the basis of their distinctive pension systems, as well as their varying demographic and aging trends.

Source: Transamerica Center for Retirement Studies® News Release (May 29, 2014)

Brookings Issues Report on Retirement Trends in 20 Industrialized Countries: Recession Accelerating Delayed Retirements

A report from the Brookings Institution finds that since Great Recession, the trend toward later retirement in industrialized countries has not only continued, but has accelerated. According to "Impact of the Great Recession on Retirement Trends in Industrialized Countries," by Gary Burtless and Barry Bosworth, when the recession began most rich countries were experiencing an increase in labor force participation rates after age 60. In their paper, they examined whether the downturn slowed or reversed the trend toward higher old-age participation rates, using straightforward time series analysis to test for a break in labor force trends after 2007.

Averaging across all 20 countries in our sample, the pace of labor force participation gains has accelerated since the onset of the Great Recession. As noted, the participation rate of 60-64 year-olds increased at an average rate of 0.4 percentage points a year between 1989 and 2007. Between 2007 and 2012 the participation rate in this age group increased an average of 1.5 percentage points a year. In 12 of the 20 countries, the increase in the trend rate of participation change was statistically significant. The participation rate of 65-69 year-olds increased at an average rate of 0.1 percentage points a year between 1989 and 2007. Since 2007 the participation rate in this age group has increased an average of 0.8 percentage points a year across the sample countries. In 13 of the 20 countries, the rise in the trend rate of participation gain was statistically significant. In the oldest age group, 70-74 year-olds, the trend rate of increase in participation rose from 0.05 percentage points a year between 1989 and 2007 to 0.32 percentage points a year after 2007. In 12 of the 19 sample countries the increase in the pace of participation gain among 70-74 year-olds was statistically significant.

While countries that experienced unusually severe downturns, including Ireland and much of southern Europe, represent exceptions to this generalization, the authors conclude that, on the whole, however, the trend toward later retirement in rich countries has not been reversed as a result of the Great Recession.

According to Robert Samuelson, this study suggests that the "We may be witnessing the last gasp of early retirement" and not just in the United States.

Source: Brookings Institution Paper (December 16, 2013)

OECD Issues Reports on Country Initiatives To Stimulate Employment of Older Workers Since 2005

In a series of country notes, the OECD has evaluated the impact of recent policy reforms and measures to boost job opportunities for older workers in 21 countries which participated in the OECD 2003-05 review of ageing and employment policies. According to the OECD:

The data show a steady increase over the past decade of the employment rate of people aged over 50 in the OECD area, from 55.6% of 50-64 year-olds in 2001 to 61.2% at the end of 2011. At the same time, the effective age at which people retire has increased slightly: for men, from 63.1 in 2001 to 63.9 in 2011 and for women, 61.1 in 2001 to 62.8 in 2011. The data also reveal a striking difference in 2011 between countries in the share of people aged over 60 still working: from 63.4% in Sweden to 14.2% in Hungary (see data for countries below).

In 2006, OECD issued its report "Live Longer, Work Longer" in which it recommended steps to:

• Strengthen financial incentives to carry on working and reducing incentives to retire early;
• Tackle employment barriers on the side of employers, such as increasing awareness of anti-age discrimination laws; and
• Improve the employability of older workers, such as boosting the incentives for job centres to place older unemployed job seekers in work.

More detailed analysis will become available in a chapter of the 2013 Employment Outlook in June 2013. In addition to the 21 country reports linked below, OECD issued a scorecard on older workers  in 34 OECD countries.

• Australia
• Austria
• Belgium (in French)
• Canada (forthcoming)
• Czech Republic
• Denmark
• Finland
• France (in French)
• Germany
• Ireland
• Italy
• Japan
• Korea
• Luxembourg (in French)
• Netherlands
• Norway
• Spain (in French)
• Sweden
• Switzerland (in French)
• United Kingdom
• United States

Source: OECD Ageing and Employment Policies (October 17, 2012)

Nordic Labour Journal Publishes Issue Focused on "Age is no Barrier"

The Nordic Labour Journal has published an in focus issue on "Age is No Barrier." Focused on demystifying old age and presenting points of view and debates emerging from changing demographics, articles in the Journal include:

• "Active old age and solidarity between generations"
• "Myths dominiate attitudes to older people in the workplace"
• "Flextime key to a longer working life"
• "Just how many older workers are there? And do they want to work more?"

Source: Nordic Labour Forum (Feburary 9, 2012)

Northern Europe: Forum Addresses Encouraging Older Workers To Stay in Workforce

At the Northern Europe Forum, on 8-9 February 2012, the leaders of the Nordic and Baltic countries and the United Kingdom met to discuss common social challenges, focusing on two important issues that are vital to achieving long-term sustainable growth: (1) How do we get more women into top positions and more women entrepreneurs? and (2) How do we get senior citizens to stay longer in the labour force? In addition, a conference on "Beyond 65: new life chances in the labour market" was organized by the Government Commission on the Future of Sweden to run alongside the Northern Future Forum.

On the latter issue, "[f]lexibility, a voluntary basis and respect for the skills and experience of senior people were among the most frequent words heard in the discussion on how the nine prime ministers could increase the proportion of senior people in the workforce. The delegates at the Northern Future Forum seemed to agree that the issue is complex and requires a change of attitude across the whole of society." A summary of the day's discussions as well as a webcast on the topic are available.

In preparation for the forum a paper--"Nine countries’ perspectives on women entrepreneurs and leaders and senior citizens in the labour force"--was published with a country-by-country description of the initiatives that have been taken to get older persons to stay in the work force. In addition, documents were prepared of statistics of the number of seniors in the workforce.

At the Commission on the Future session, the message from Swedish Prime Minister Fredrik Reinfeldt was that more people must be encouraged to work into older age and they must be prepared to retrain or change professions or careers during our working lives.

Sources: Nordic Labour Journal "Older people to be encouraged to work for longer" (February 9, 2012); Government of Sweden Northern Future Forum

Research: Dissertation Questions Whether Longer Working Life is Good for Everyone

According to a doctoral thesis written by Björn Ohlsson for the Department of Ethnology, University of Gothenburg, following life history interviews with 16 workers aged between 49 and 62 at Volvo's Torslanda plant, a prolonged working life is not seen as desirable by the workers for three main reasons: health issues brought about through long-term physical labour, especially as regards the women, less motivation caused by a sense of subordination, diminished influence and fewer opportunities at work when ageing, and finally the frequent pension scheme offers by the company.

In "We who stayed at Volvo--an ethnological study of senior automobile-industry blue-collar workers' working-lives and future plans" (and see English summary), Ohlsson reveals that things can be particularly tough for certain groups of industrial workers. This is due to the fact that they have had a long and arduous working life, and that changes in the workplace have resulted in diminished opportunities for older people to stay on. While the thesis reports that all of them want to retire before 65, they stress how much work has meant to them, and to some extent, how much it still means. they emphasize in particular the sense of community that exists in a workplace, and the experience of continuity that work provides. In addition, the relatively well paid work has provided them with the opportunity to create a good life materially with a sense of pride and dignity.

See also Arkipelag, which is publishing the thesis.

Source: University of Gothenburg Press Release (January 20, 2009);