Workforce participation of mature aged women Geoff Gilfillan Senior Research Economist Productivity Commission Productivity Commission
Topics Trends in labour force participation Potential labour supply Are preferences for hours of work being matched? Is there evidence of gender wage gaps? Age discrimination Retirement issues Productivity Commission 2
Participation effect - trends in labour force participation of mature aged women and men 100 90 80 70 60 50 40 Participation rates for mature aged women continue to rise While part rates for mature aged men have fallen slightly (apart from those aged 60 to 64 yrs) 30 20 10 0 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 (%) Men 45 to 54 yrs Men 55 to 64 yrs Women 45 to 54 yrs Women 55 to 64 yrs Productivity Commission 3
Demographic effect increasing share of total population and total hours worked by women aged 45 to 64 years 18.0 16.0 share of total pop share of total hrs worked 14.0 (%) 12.0 10.0 8.0 6.0 4.0 2.0 0.0 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 The share of total hours worked of mature aged women is rising faster than their share of the population Productivity Commission 4
Narrowing of the participation gap Age Group October 1989 October 2009 Women (%) Men (%) PR gap % pts Women (%) Men (%) PR gap % pts 15 to 19 yrs 58.5 61.0-2.5 57.1 55.2 1.9 20 to 24 yrs 77.5 89.1-11.6 76.8 81.4-4.6 25 to 34 yrs 65.5 94.6-29.1 72.8 90.8-18.0 35 to 44 yrs 70.2 93.5-23.3 74.7 91.9-17.2 45 to 54 yrs 59.3 89.0-29.7 77.7 88.7-11.0 55 to 59 yrs 32.2 75.8-43.6 63.5 78.2-14.7 60 to 64 yrs 14.8 49.4-34.6 41.6 58.7-17.1 65 plus 2.3 9.6-7.3 6.1 15.9-9.8 Data Source: ABS (2009) Labour Force Survey detailed 6291.0.55.001, Electronic delivery, January 2009. Productivity Commission 5
Work intensity effect - Average hours worked per week for all employed mature aged women (FT & PT) 31.0 30.0 Average hours worked per week 29.0 28.0 27.0 26.0 25.0 24.0 Avge hours 45 to 54 yrs (FT & PT) Avge hours 55 to 64 yrs (FT & PT) Average hours worked per week of women aged 45 to 54 years has risen slightly over the past 30 years 23.0 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 Productivity Commission 6
High proportion of employed women work part time 60 50 % share of workforce PT 40 30 20 15 to 24 yrs 25 to 44 yrs 45 to 54 yrs 10 0 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 Preference for PT work is long established for older women relatively new phenomenon for younger women 55 to 64 yrs Productivity Commission 7
How does labour force participation of Australian women aged 45 to 54 years compare with other OECD countries? 100.0 90.0 80.0 70.0 1988 2008 Australia is in the middle of the pack 60.0 (%) 50.0 40.0 30.0 20.0 10.0 0.0 Turkey Greece Italy Spain Ireland OECD countries Japan United States Netherlands AUSTRALIA United Kingdom Canada New Zealand Germany France Norway Denmark Sweden Finland Data source:.oecd Statistics Portal Productivity Commission 8
7 6 Unemployment Rate 5 Sustained strong (%) 4 employment 3 conditions has contributed to a 2 1 0 45 to 54 yrs 55 to 64 yrs falling unemployment 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 rate and level of LTU 45 for mature aged women 40 35 30 Mature Aged Women Mature Aged Men Level of long-term Unemployment (LTU) ('000) 25 20 15 10 5 Data source: ABS Labour Force Survey (ST UM3) 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Life cycle participation rate of women and men large increases in female participation and less pronounced M shape in 2009 90 80 70 60 Women (%) 50 40 30 Oct-79 Oct-89 20 Oct-99 10 Oct-09 0 15 to 19 yrs 20 to 24 yrs 25 to 34 yrs 35 to 44 yrs 45 to 54 yrs 55 to 59 yrs 60 to 64 yrs 100 90 80 70 60 Men (%) 50 40 30 20 10 Oct-79 Oct-89 Oct-99 Oct-09 Data source: ABS Labour Force Survey 0 15 to 19 yrs 20 to 24 yrs 25 to 34 yrs 35 to 44 yrs 45 to 54 yrs 55 to 59 yrs 60 to 64 yrs
Cohort analysis of labour force participation of women 90 80 1978-82 1973-77 1968-72 1963-67 70 60 Participation Rate (%) 50 40 1958-62 1953-57 1948-52 1943-47 1938-42 1933-37 30 1928-32 20 10 1923-27 0 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 Age Groups Data source:. OECD Statistics Portal. Productivity Commission 11
Potential supply - labour force status of women aged 45 to 64 years Labour Force 1 845 900 (67.3% of population (pop) Population of women aged 45 to 64 years 2 744 800 Not in the labour force (NILF) 898 900 (32.7% of pop) 68 500 carers 159 200 retired 135 200 long term illness 409 00 home duties 200 000 were outside the labour force but wanted to work Employed 1 787 700 (65.1% of pop) Unemployed 58 200 (2.1% of pop) Marginally attached and wanted to work 138 700 (5.1% of pop and 15.4% of NILF) Without marginal attachment 760 200 (27.7% of pop and 84.6% of NILF) includes retired or voluntarily inactive, home duties, long-term health condition or disability and caring for ill or disabled person Marginally attached but actively looking 4 900 (0.2% of pop and 0.5% of NILF) Discouraged job seekers 26 900 (1.0% of pop and 3.0% of NILF) Marginally attached not actively looking but available in a month 133 700 (4.9% of pop and 14.9% of NILF) Other reasons for not looking 106 800a (3.9% of pop and 11.9% of NILF) Did not want to work 597 200 (21.8% of pop and 66.4% of NILF Wanted to work but not looking and not available 61 100 (2.2% of pop and 6.8% of NILF) Permanently unable to work 101 900 (3.7% of pop and 11.3% of NILF) Potential labour supply could be around 7.3% of the population but a significant proportion face a number of barriers and disadvantages and may have been outside the workforce for some time. Significant that two thirds of NILF don t want to work and 11.3% can t work. Source: Published and unpublished data from ABS Persons Not in the Labour Force, September 2009, Cat. No. 6220.0
Reasons why women aged 45 years or more who wanted more hours of work or a paid job did not look for work: 2006-07 Lacks necessary training/qualifications/experience Considered too old by employers Unable to work because of disability No jobs with suitable conditions or arrangements Short-term sickness or injury No jobs or vacancies in locality or line of work Studying or returning to studies Taking holidays Caring for children Caring for ill, disabled or elderly person Home duties No need/ satisfied with current arrangements/retired from FT work Other Not applicable Total 000 8.5 39.9 31.9 6.3 19.8 8.3 3.6** 3.7** 21.8 25.4 16.5 21.6 26.1 2.4** 235.7 % of total 3.6 16.9 13.5 2.7 8.4 3.5 1.5 1.6 9.2 10.8 7.0 9.2 11.1 1.0 100.0 Source: ABS Barriers and Incentives to Labour Force Participation (Cat. no. 6239.0) unpublished data Other includes difficulties with language or ethnic background, believes disability discourages employers, problems with access to transport, moving house, pregnancy and permanently unable to work. Productivity Commission 13
Are preferences for hours worked by employed mature aged women being matched by hours usually worked? Around a half of mature aged women work PT Two thirds of mature aged women working PT are satisfied with current hours A half or mature aged women working FT want to reduce their hours Hours usually worked per week Hours preferred Mature aged women working 1 to 19 hrs Mature aged women working 20 to 34 hrs Mature aged women working PT (1 to 34 hrs) Mature aged women working 35 to 49 hrs Mature aged women working 50 to 80 hrs Mature aged women working FT (35 to 80 hrs) Total No change 66.2 67.1 66.8 54.1 27.8 48.5 56.4 1 to 10 more hrs 14.5 15.3 15.0 2.0 0.0 1.6 7.4 11 to 20 more hrs 10.1 5.2 7.0 0.0 0.0 0.0 3.0 21 hrs or more 6.3 0.0 2.3 0.0 0.0 0.0 1.0 1 to 10 less hrs 2.9 8.2 6.3 21.8 12.7 19.9 14.0 11 to 20 less hrs 0.0 3.6 2.3 18.9 34.2 22.1 13.5 21 hrs or less hrs 0.0 0.5 0.3 3.2 25.3 7.9 4.6 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Source: HILDA Wave 7 (2007) weighted data
Net difference between preferred and usual hours of work for mature aged women and men a Hours worked Women 45-64 years % difference between preferred and usual hours Men 45-64 years % difference between preferred and usual hours 1 to 19 hours 20 to 34 hours 35 to 49 hours 50 to 80 hours TOTAL 35.9 2.1-14.3-27.4-10.8 41.0 5.4-7.1-18.8-11.0 a Outliers have been deleted from the data i.e. those working more than 80 hours per week. Source: HILDA Wave 7 (2007) weighted data In other words if all preferences were met, net total hours worked by mature aged women would fall by 10.8%
Returns from working gender wage gap - ratio of female to male hourly earnings ratio by age (a) 1.20 Female to male gender earnings ratio 1.00 0.80 0.60 0.40 0.20 1999 2004 2008 2009 Wage parity No gap to age 30 widens progressively with age No perceptible narrowing over time i.e. gap just as wide in 2009 as it was in 1999 0.00 15 19 20 24 25 29 30 34 35 39 40 44 45 49 50 54 55 59 60 64 Age (a) For full-time non-managerial employees in main job. Excludes owner managers of incorporated enterprises who are not drawing a wage /salary and people on workers compensation. Data source: Unpublished ABS Employee Earnings Benefits and Trade Union Membership Cat. No. 6310.0 (2009) Productivity Commission 16
Reasons for wage gaps Women are concentrated in relatively low paid jobs compared to men e.g. caring (children and elderly), nursing, clerical, admin etc Wage gaps are narrower in public sector e.g. teaching and public service widest in financial services Women pay a wage penalty for having children many want to work PT on return to work, some want less responsibility trade off wages for flexibility As children get older may return to FT hours and look for more responsibility participation rates jump for those aged 45 to 54 years Will be interesting to observe the impact of the paid parental scheme will it lead to narrower wage gaps? Productivity Commission 17
30 Female and male median earnings by age and children Median hourly wage rate ($) 25 20 15 10 5 0 20 to 24 25 to 29 30 to 34 35 to 39 40 to 44 45 to 49 50 to 54 55 yrs plus Age Women with at least 1 child Women with no children 30 Older men with children are actually paid more than those With no children opposite for women Median hourly wage rate ($) 25 20 15 10 5 Men with at least 1 child Men with no children Source: HILDA (Wave 7 data). 0 20 to 24 25 to 29 30 to 34 35 to 39 40 to 44 45 to 49 50 to 54 55 yrs plus Age
Demand factors - in which occupations are mature aged women employed? Occupation 45 to 64 years 15 to 44 years Women (% of total) Men (% of total) Women (% of total) Men (% of total) Managers 12.2 21.1 9.1 12.2 Professionals 24.7 20.4 23.7 18.5 Technicians and trade workers 3.4 19.8 4.7 25.3 Community & personal service workers 13.3 4.0 15.0 6.2 Clerical and administrative workers 27.0 6.9 23.3 6.5 Sales workers 8.1 4.5 15.9 8.0 Machinery operators and drivers 1.3 12.8 1.0 9.2 Labourers 10.0 10.4 7.3 14.0 TOTAL 100.0 100.0 100.0 100.0
Demand factors in which industries are mature aged females employed Just under a half of employed mature aged women have jobs in Health care and social assistance, Education and training and Retail trade. Employed mature aged women accounted for a third of total employment growth in the fifteen years to November 2009. Mature aged women have had a significant share of employment growth in service industries Productivity Commission 20
Supply factors affecting participation Household characteristics - partnered or single, with or without children Education attainment Health status those with poor health less likely to participate Caring responsibilities (children or elderly, sick or disabled persons) Wages those aged 55 yrs plus are less responsive to change in wages (inelastic supply) Labour market experience Ethnicity country of birth and proficiency with English Strength of labour market conditions Wages and labour force status of partner mature aged women tend to mimic the labour market behaviour of their partner Productivity Commission 21
Household characteristics - participation of women by number of children 100.0 90.0 80.0 Women 25 to 44 yrs Women 45 to 54 yrs Women 55 to 64 yrs 70.0 60.0 (%) 50.0 40.0 30.0 20.0 10.0 0.0 0 children 1 child 2 children 3 children 4 children or more Number of children Source: HILDA Wave 7 (2007) weighted data Productivity Commission 22
Labour force participation of women by age and level of education 100.0 90.0 80.0 70.0 60.0 (%) 50.0 40.0 30.0 20.0 10.0 0.0 Degree plus qualifications Non degree post-school qualifications No post-school qualifications Total 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 66 69 72 75 Age Data source: ABS Population Census 2006 Productivity Commission 23
Labour market experience - participation of mature aged women by number of years in paid work 100.0 90.0 80.0 PR of women 45 to 54 yrs PR of women 55 to 64 yrs 70.0 60.0 (%) 50.0 40.0 30.0 20.0 10.0 0.0 5 years or less 6 to 10 years 11 to 15 years 16 to 20 years 21 to 25 years 26 to 30 years 31 to 35 years 36 to 40 years Years in paid work Source: HILDA Wave 7 (2007) weighted data Productivity Commission 24
Any evidence of age discrimination for mature aged women? Strong growth in employment of mature aged women across a range of industries, when combined with low unemployment rates over the past two decades, does not support the view that there is substantial generalised age discrimination. Productivity Commission 25
Age discrimination Studies have found that employers generally regard older workers as having a better work ethic than younger workers, appreciate their jobs more, take fewer sick days, are more presentable and more punctual, and more responsible and wiser than younger workers. These positive perceptions are countered by negative views of employers such as older workers are less adaptable to new technology, less interested in technological change, less trainable, less ambitious, less energetic, less healthy, less creative, less mentally alert, less flexible, and not as physically strong Productivity Commission 26
Access to training A report commissioned by the Victorian, South Australian and Western Australian Equal Opportunity Commissions and the Australian Employers Convention found that older workers get less access to training opportunities compared to younger workers. This was primarily due to the perception that older people only have a short period of time before retirement and that instead it may be preferable to offer training opportunities to younger workers where returns to investment are more likely to be realised. These findings do not appear to be supported by HILDA data. Productivity Commission 27
Do older women have less access to training? Accessed work related training in last 12 months 15 to 24 yrs (% of total) 25 to 44 yrs (% of total) 45 to 54 yrs (% of total) 55 to 64 yrs (% of total) 45 to 64 yrs (% of total) 15 to 64 yrs (% of total) Women 25.7 33.5 38.3 30.8 35.8 32.5 Men 29.6 32.2 32.3 26.1 30.1 30.9 Women working PT 22.1 25.2 33.3 24.8 30.2 26.0 Women working FT 35.2 41.8 44.4 39.1 42.9 41.1 Source: HILDA Wave 7 (2007) weighted data
Retirement issues Women retire earlier than men, but the gap in retirement ages appears to be narrowing, and the retirement ages for both men and women have risen over the past decade Productivity Commission 29
Average effective age of retirement of women and men in Australia (a) 70 68 66 Men Women Retirement age 64 62 60 58 56 54 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 (a) Average age of final withdrawal from the labour force Source: Society at a Glance 2009 OECD Social Indicators Productivity Commission 30
Average age of retirement in selected OECD countries - 2002 to 2007 Average effective age of retirement 70.0 68.0 66.0 64.0 62.0 60.0 58.0 Women Men 56.0 France Italy Germany Netherlands Canada United Kingdom AUSTRALIA OECD average Sweden Spain Norway New Zealand United States Switzerland Japan Productivity Commission 31
Eligibility for pension and participation rates Participation rate 60 to 64 year old women 80 60 40 20 0 Italy Greece Czech Republic Korea UK Japan France Belgium Poland Austria Hungary AUSTRALIA OECD Slovak Republic Switzerland 56 58 60 62 64 66 68 Official retirement age for women Sweden NZ Iceland USA Norway Canada Finland Portugal Ireland Denmark Germany Spain Netherlands Productivity Commission 32
Importance of PT work Around a half of women aged 60 to 64 years were working part-time at retirement compared with only 12 per cent of men of the same age Productivity Commission 33
Factors driving retirement of women According to data from the HILDA survey the main factors driving retirement of women aged 50 to 69 years in 2007 were: own ill health (22.8 per cent of responses) financial reasons (11.6 per cent) seeking to escape the stress and demands of working (10.3 per cent) to spend more time with family members (9.5 per cent) and have more personal or leisure time (7.7 per cent). HILDA data shows a much higher percentage of men aged 50 to 69 years cited ill health (39.0 per cent) and financial reasons (18.5 per cent) as the major motivating factors behind retirement. Productivity Commission 34
Superannuation While superannuation balances for women are lower than those for men they have been increasing for mature aged women. 31 per cent of women aged 55 to 64 years had a superannuation balance of $100,000 or more in 2007 compared with 43 per cent of men Only 18 per cent of women aged 55 to 64 years had a balance of $100,000 or more in 2000. Productivity Commission 35
Main findings of the report Labour force participation rates of mature aged women have been rising steadily and show no signs of slowing. As a result it may not be necessary to develop drastic policy interventions to encourage participation. Mature aged women have a strong preference for part-time hours and two thirds of PT workers are happy with the hours they are currently working. Almost a half of mature aged women working fulltime would like to reduce their hours of work. ABS data shows around 7.3 per cent of mature aged women are involuntarily outside the labour force and around 1 per cent are discouraged job seekers. Productivity Commission 36
Main findings of the report (contd.) ABS and HILDA data confirm the presence of gender wage gaps after the age of 30. Mature aged women have benefited substantially from strong employment growth in service industries such as health and education. Higher education attainment and good health are the major supply influences on participation - having children is one of the major contributors to nonparticipation of women. Engagement in work earlier in life and maintaining workforce attachment for as long as possible contributes to workforce participation later in life. Higher educational attainment of current cohorts of younger women and access to paid parental leave will continue to boost participation of mature aged women in the future Productivity Commission 37
Data gaps - possible areas of research Need to know a bit more about the 200,000 mature aged women who want to work and the factors that are preventing them from working Very few surveys or detailed studies have been done on age discrimination in Australia but rising participation rates and low unemployment rates for mature aged women would suggest the level of discrimination is not widespread or significant Productivity Commission 38