In a recently published paper by the Office for National Statistics (ONS), older people are moving back into the labour market. There has been a steady rise in the number of older people, classed as those over 65, into both part-time and full-time work – is this a trend which is set to stay and what is driving it?
Of those aged 65 or over in October to December 2010 2.7 per cent (270,000) worked full-time, up from 1.2 per cent (106,000) in January to March 2001 whilst 6.1 per cent (600,000) worked part-time, up from 3.4 per cent (306,000) in January to March 2001.
The total number of older people in the labour market at the end of 2010 had doubled from the start of the year in 2001.
Two extremely interesting statistics from the report deal with the recession and the length of time in work. According to the report, between the first quarter in 2008 (the last quarter before the recession), and the fourth quarter in 2010 (the most recent quarter), the full-time employment rate fell by 7.4 percentage points for those aged 16 to 24, but rose by 0.5 percentage points for those aged 65 and over (the only demographic to increase). Furthermore, the demographic of 50-64 saw a decrease of 0.9 per cent – a far better result than that of younger demographics. As for part-time employment, the over 65 demographic saw the largest rise over the same period of one per cent whilst the 50-64 demographic saw a decrease of 0.1 per cent – a small decrease but was the only demographic to have a fall.
While it is important to recognise that the base level of employment for this demographic is far lower than the other demographics, it is nonetheless remarkable to see such resilience and growth.
The issue of length of employment is important also. The report states that in the fourth quarter of 2010, of those aged 65 and over and working, 83 per cent (722,000) had been continuously employed for five years or more, with just over 40 per cent working in the same job for more than 20 years (358,000).
This longevity of employment is impressive once more, especially in the context of the financial crisis. Perhaps this demographic has the necessary collateral to apply for a loan to start a business or has the necessary savings to do so also. For those people not self-employed but employed by a firm, there seems to be a distinct shift towards experience accumulation as younger, inexperienced people have been let go during the recession. This could go someway to explaining how the younger demographic are finding it tough to find jobs; they have either been replaced by older people or cannot fill a vacancy an older person would normally have retired from earlier.
Moreover, there seems to be a distinct shift in the debate from both the older generation and employers. Older people may be looking to supplement their pensions in order to combat the rising inflation (which is far worse for this demographic as the majority of their income is spent on those goods which are rising faster such as food and energy) and the general cuts in state funding. The shift in debate from employers comes because they may see the benefit of more flexible working patterns and the wealth of experience on offer.
This shift is no bad financial thing for this demographic and the economy as a whole. According to a report for the volunteer charity WRVS, looking at tax payments, purchasing power, responsibilities (such as caring and aid) and the volunteering effort of people aged over 65, it calculates that this demographic contributes almost £40bn more to the economy than they receive in state pensions, health care and welfare. Furthermore, this benefit to the economy will increase in coming years as the “baby boomer” cohort enters retirement and will therefore contribute a larger net amount to society and the economy. If these results are taken for those who have already retired then the increase in the number of people working over their retirement age would only contribute more to the economy and thus has major potential.
There is no doubt that the resilience and opportunities offered to this demographic far outstrips that of other demographics and can be seen as a major positive. With the right support older people can continue to contribute to the economy whilst simultaneously benefiting their own financial position. Having said this, if the only reason that this demographic is continuing to work is because of inflation and cut backs, which are harder felt compared to other demographics, then this is a serious cause for concern for society.
If older people want to work then the data released here looks encouraging and there are shifts in the debate from both society and employers. With the correct support, both older people and the economy can benefit from such experience.