The age at which workers retire is increasing, largely due to policy changes designed to extend working lives, including raising the state pension age (SPA). However, this trend toward working longer is relatively new and, so far, little is known about why some people work beyond SPA and whether, and to what extent, this affects their well-being.
Continued work after SPA might provide workers with an opportunity to engage in physical, cognitive, and social activities leading to higher quality of life (QoL). However, a reverse effect is also possible if those extending their working lives do so because they feel that they ‘have to’ (for instance, out of financial necessity).
In a recent publication (Di Gessa et al., 2017), we used data from the English Longitudinal Study of Ageing (ELSA) to better understand why older people are in paid work beyond SPA, and whether these reasons are associated –both cross-sectionally and over time –with QoL measured using the CASP-19 scale.
In our analyses, we selected ELSA respondents who had reached the current SPA (65 for men, and 60 for women in 2008/09). In particular, we considered men aged 65-74 and women aged 60-69 who were interviewed in 2008/09 and in 2014/15. We excluded older respondents as few men and women work beyond 74 and 69, respectively.
Who works beyond SPA and why?
About one respondent in five reported working beyond SPA. This is comparable to data from the Labour Force Survey which shows that 23% of women aged 60-69 and 16% of men aged 65-74 were in paid employment in the UK in 2009.
Of those working beyond SPA, about two thirds reported that they were in paid work ‘voluntarily’, i.e. because they ‘enjoy working’ or to ‘keep active and fit’; the other third, however, reported financial issues as their main reason to work (i.e. because they ‘could not afford to retire earlier’ or wanted to ‘improve their pension/financial position’).
Table 1 shows CASP-19 scores by employment status. Respondents working voluntarily reported the highest QoL (CASP-19= 45.4) whereas the lowest QoL was reported by those who retired involuntarily (CASP-19=38.9). To give an idea of the effect sizes, a similar difference of about 7 CASP-19 points was found between respondents who reported no longstanding illness and those with a limiting longstanding illness. As expected, respondents with more advantageous socio-economic characteristics and better health reported higher baseline CASP-19 scores.
Table 1. Baseline unadjusted CASP-19 score by employment status, ELSA 2008/09
|% in sample||Mean CASP-19 score|
|Retired at SPA||27.8||41.9 (0.31)|
|Voluntarily retired||27.7||44.4 (0.26)|
|Involuntarily retired||24.6||38.9 (0.36)|
|In paid work, financial necessity||6.8||41.0 (0.65)|
|In paid work, voluntarily||13.1||45.4 (0.36)|
The results of a series of linear regression models show that, even once we take into account the socio-economic and health characteristics of the respondents, the reasons for being in paid work were significantly associated with CASP-19 scores. Those in paid work beyond SPA out of financial necessity were significantly associated with worse QoL (β=-1.21) compared to those who had retired at the expected/usual age. On the other hand, respondents who voluntary extended their working lives reported significantly better QoL (β=1.62). Among retirees, those who reported voluntary retirement were significantly more likely to report higher QoL (β=1.12).
When we focus on changes over time, only respondents who stopped working between waves but who had previously worked beyond SPA voluntarily reported improvements in CASP-19 scores (β=0.97), although this was only marginally significant (p<0.10). In contrast, involuntary retirement six years earlier had an enduring negative effect on QoL (β=-1.59).
In sum, our results suggest those working beyond SPA for positive reasons (about two thirds of workers) report the highest levels of QoL, and also experience marginal improvements in QoL when they eventually leave the labour market. This is most likely because they have control over both the initial decision and the following transition. In contrast, those working beyond SPA out of financial necessity (one third of workers) report a CASP-19 score of about 4 points lower at baseline, and this level is unlikely to rebound upon eventual retirement. In light of the association between QoL and adverse health outcomes, including mortality, this is particularly worrisome.
Understanding why people continue working past SPA, and its implications for health and well-being across social groups is important given the potential for some social groups to be disproportionately disadvantaged by longer working lives. While initiatives aimed at helping workers maintain control over the decision to extend their employment are worthwhile, policy makers must also consider mechanisms to support individuals across the life course to ensure a minimum financial well-being in later life in order to mitigate the negative implications for QoL of having to work longer.
Guest blog post by Dr Giorgio Di Gessa, LSE Fellow in Population Health/Global Ageing, Department of Social Policy, LSE
Di Gessa, G; Corna, L.; Price, D; and Glaser K (2017). The decision to work after State Pension Age and how it affects Quality of Life: Evidence from a 6-year English panel study. Age and Ageing DOI: 10.1093/ageing/afx181