RETIREMENT Differences in State of Affairs and legacies across the EU28
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1 RETIREMENT Differences in State of Affairs and legacies across the EU28 EC/OECD Workshop on delivering longer working lives and higher retirement ages Brussels, November 2014 Fritz von Nordheim European Commission DG EMPL D3
2 Differences in State of Affairs and legacies across the EU28 Scene setter alerting us to Complexity of EU28 Explanations in demographics & policy legacies Not just Differences but Divides Not just Divides but continuing Divergences Not just one but several Narratives of Ageing Challenges differ in timing & speed as well as size Not just challenges but also perceptions differ In sum: Need for diversified EU policy responses
3 The power of longer working lives EU-27 old-age dependency ratios, , under four exit assumptions (working ages from 20 to 59 through 69) to 59 / to 63 / to 66 / to 69 /
4 Economic vs. Demographic dependency burden EU-27 / 2010 demographic dependency ratio: 26% Economic dependency ratio: 65% EU-27 / 2050 ( EU 2020plus scenario ) demographic dependency ratio: 50% economic dependency ratio: 79%
5 Current State of Affairs and Recent developments across EU28
6 Employment rates 55-64, 2013
7 Employment rates 55-64, Source: Eurostat, LFS
8 Employment rates 55-64, Source: Eurostat, LFS
9 Employment rates 55-64, Source: Eurostat, LFS
10 Employment rates 55-64, Source: Eurostat, LFS
11 Employment rates rising - even in crisis Source: Eurostat, labour force survey
12 Employment rates 65-69, 2000 Source: Eurostat, LFS
13 Employment rates 65-69, 2013 Source: Eurostat, LFS
14 N/W->S/E gender bias in OW Empl rates
15 Employment rates decreasing with age, EU28, 2013 men women Source: Eurostat, labour force survey
16 Women employment rate, DK and IT Denmark Italy Source: Eurostat, LFS
17 10y N->S Gradient in Working Life Duration
18 Average duration of a working life 2000 AWL N/A Source: Eurostat, labour force survey
19 Average duration of a working life 2005 AWL N/A Source: Eurostat, labour force survey
20 Average duration of a working life 2010 AWL N/A Source: Eurostat, labour force survey
21 Average duration of a working life 2012 AWL N/A Source: Eurostat, labour force survey
22 Underlying Demographics
23 Diverging growth in life expectancy Life expectancy (at age 65) for males, average for selected countries in regions, to Courtesy of Richard Willets
24 Diverging growth in life expectancy Life expectancy (at age 65) for males, average for selected countries in regions, to Courtesy of Richard Willets
25 Diverging growth in life expectancy Life expectancy (at age 65) for males, average for selected countries in regions, to Courtesy of Richard Willets
26 Life expectancy at 65 (LE-65) by country group years Source: Eurostat, population statistics and labour force survey Courtesy of Richard Willets
27 Differences in Baby-booms Eastern Europe: 1 st ends late 1950's 2 nd in 1980's Northern Europe: 1 st ends mid-1960's Western Europe: 1 st ends late 1960's Southern Europe: 1 st ends mid 1970's
28 N/W-> S/E Divide in Recent Fertility Average fertility rates, TFR N/A Source: World bank, Health statistics
29 Tail end of the baby-booms Fertility rates, in children per woman, UK IT PL EU Source: World Bank
30 Echoes of the baby-boom (2) Renewal rate of the labour force Share of population turning 25, IT, PL and UK, base EU28= Italy Poland United Kingdom Source: Eurostat, 2013 population projections
31 Echoes of the baby-boom (3) Cohorts that retire Share of population turning 65, IT, PL and UK, base EU28= Italy Poland United Kingdom Source: Eurostat, 2013 population projections
32 Decrease in the working age population (%) (20-64), 2013-> 2030 and Source: Eurostat, 2013 population projections
33 Change in life expectancy at 65 (LE-65) and average duration of working life (AWL ), LE-65 increase AWL increase 5 4 years BE BG CZ DK DE EE IE EL ES FR HR IT CY LV LT LU HU MT NL AT PL PT RO SI SK FI SE UK Source: Eurostat, population statistics and labour force survey
34 Underlying Policy Legacies
35 Differences in Prior Pensionable Ages Eastern Europe: 60 or below, women 5 years lower Northern Europe: for women and men Western Europe: 65 - some with 60 for women Southern Europe: 65/60 or 60/55 EU as 'older workers' does not fit too well
36 Average exit age from the labour market years EU27 SK HU FR IT MT CZ FI DE DK ES EE CY UK NO NL CH SE IS Source: Eurostat
37 Importance of Early Retirement 2005 Eastern Europe: Bulk of retirement as early exit Northern Europe: Not in SE & NO but in DK & FI Western Europe: Not UK, but most other MS Southern Europe: Big share as early exit Less clear-cut divide -
38 Exiting the labour market before Standard Pensionable Age years LU FI BE PL DE IT DK ES HU FR PT CY SI SK IE HR AT NL LT EL SE MT CZ UK EE LV BG RO Source: Eurostat (exit ages) and Member States (standard pensionable ages)
39 Restricting Early Retirement 2014 Eastern Europe: Yes but maintained in many MS Northern Europe: Absent or phasing out Western Europe: Much more restricted Southern Europe: Sudden roll back, pockets remain Divide though less clear-cut
40 Male length of Retirement without exit before 65 Eastern Europe: years Northern Europe: 17,5-18,5 years Western Europe: Southern Europe: 18,3-19,2 Divide and ignificant differences -
41 Average duration of retirement women Life expectancy at age 65 pension before age years Source: Eurostat
42 Average duration of retirement men Life expectancy at age 65 pension before age years Source: Eurostat
43 Increasing standard pensionable age women age RO CZ SK BG EL HR LT MT AT PL UK IT EE SI LV HU FR BE DK DE ES CY LU NL PT SE FI IE Source: Member States
44 Gender differences in pensionable age gender in standard pension ages non-eu: no data equal pension age by 2009 equal pension age by 2020 equal pension age by 2030 not planned or after 2030 Source: Member States
45 Divide in 55+ Access to Active LM Measures 2008 Eastern Europe: Little to none Northern Europe: Access though not equal Western Europe: Some MS with some without Southern Europe: Little to none Older worker rarely seen as part of work force
46 Summary (1) Dependency to rise with ageing in all countries But with depressed fertility levels much faster In fertility: two Europes, half > 1.7, half < 1.5 Economic divergence accentuates demographic Out-migration aggravates ageing in East & South migration towards W-MS with higher fertility Countries in the East will age later (2030->) but faster and more deeply
47 Summary (2) Working longer is happening, even above age 65 Working lives are extending, notably for women Pension ages rising, especially for women But those needing most to extend/rise behind Divides & Divergences require diversified EU approach European Semester not necessarily targeting the laggards, impact more on the already improved
48 Thank you for your attention
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