Economic inactivity 50 % higher for older workers than for others

30 November 2017

The European Foundation for the Improvement of Working and Living Conditions (Eurofound) has released a report on inactivity policies to reduce it in Europe. The report entitled ‘Reactivate: Employment opportunities for economically inactive people‘ points out that one in four EU citizens of working age (27 % of 15-64 year-olds) are economically inactive, meaning that they are not in employment and not looking for it. For older workers (55-64), this figure is 50 % higher, at 41 %. Although inactivity has declined steadily in recent years, progress is only very slow.

Inactivity means that persons are neither looking for a job and nor working – people in education and training, as well as retirees are considered inactive. Therefore, inactive people do not figure in unemployment statistics, which only cover persons in employment or looking for a job. The Eurofound research has found that important gender differences remain also for older workers: while 33% of older workers are inactive, this percentage reaches 48 % for older women. Inactivity rates of older people also vary according to the country: it exceeds 55% in Slovenia, Luxembourg, Croatia, Romania and Greece, while remaining below 30% in Sweden, Germany, Estonia and Denmark.

The report points out that older people’s inactivity is often linked to low hiring rates. The fact that older peoples’ inactivity rates are receding is mainly linked to generational effects with people staying longer in their jobs due to higher pension ages, and women with higher employment rates moving into the older categories, while a generation of women with lower employment rates during their working lives are moving into retirement age. However, other reasons for high inactivity are also pointed out:

Retirement and early retirement accounts for much inactivity with older people
A high number of older inactive people are so because of health problems or disabilities
Since 2010, the number of people aged between 40-65 who are inactive because of retirement has decreased, however more people are now inactive because of health problems – confirming that the rise of retirement ages is shifting people who are unable to work from retirement into inactivity for health reasons.
Since 2010, more older workers (40-65 years) have become inactive because of caring responsibilities (children or dependent adults), and more think that there is no job available to them. This retranslates AGE’s experience of many older jobseekers having given up searching for work, and therefore not covered by active employment policies nor by unemployment statistics.
Among retired people (under 64 years), over 60 % would like to work, among inactive people with health problems or disabilities, this proportion rises to 80 %
Among older inactive people (55+) in Poland, 27 % said that they would be willing to work if they had opportunity to work from home, significantly more than in other age groups. 53 % said they would be willing to work if they could retain the right to social benefits
Among all inactive people (15-64), 13 % care for an older or disabled family member, with a gender gap of 6 percentage points (15 % of women; 9 % of men)
Inactive people show a particular high risk of depression, and among inactive people this figure is extremely high for retired (29 %) and disabled or long-term ill people (59 %)
Service providers confirm that it is challenging to reactivate older people. Limiting factors identified by employers are lack of flexibility or motivation, or lack of knowledge of modern technology and foreign languages. This confirms that ageist views are prevalent among employers and that life-long learning, targeted towards older inactive, can have important benefits in activating them.

The report lists a number of policy measures that could help reducing inactivity. The first is to make inactivity visible as an indicator in economic governance mechanisms. Also, Eurofound recommends acting again on the Active Inclusion Recommendation of 2008, which recommended tailored approaches consisting of active labour market policies, income support and provision of adequate support services as a way to activate people. Upskilling measures can prove particularly important to increase employment rates.

AGE welcomes the report and finds many of its demands underpinned by it. Allowing a combination of pension and employment, investing into life-long learning, including for older people, providing quality long-term care services and building capacity in local public services, such as employment services, will be beneficial in allowing older people who have given up looking for a job to try to find employment. More importantly, ageist stereotypes are still prevalent among employers and service providers, who find it particularly challenging to work with older jobseekers, and this is internalised by many older jobseekers, who are discouraged and lack confidence in their own skills. AGE therefore calls for more coherent strategies specifically for older jobseekers and older inactive people.