Remaining active in the labour market: Trends and characteristics of the over 50s

Leisure time in general has increased, particularly in European countries, since the 1960s (Aguiar and Hurst, 2007; Freeman and Schettkat, 2005). For many older workers over 50, depending on their economic circumstances, there is increasingly a potential choice between remaining economically active or retiring and exiting the labour market. Older workers who remain economically active are likely to do so either through economic necessity or because they value the income gains from work over the availability of extra leisure time.

A number of economic and sociological factors can be identified that likely influence older people’s decision to remain economically active. Economic explanations focus on the time preferences of individuals with regard to the trade-off between income and leisure (Becker, 1965; Ghez and Becker, 1975). Rational individuals are assumed to want to maximise the things they enjoy most. The trade-of between work as a source of income and leisure means that the more people work, the less leisure time available to them. Older workers are more likely to exit the labour market where leisure time is valued more highly than the opportunity for extra income. Alternatively, where older workers value maximising earnings over extra leisure time, the more likely they are to remain active in some capacity in the labour market. Sociological explanations dwell on the intrinsic rewards of work. Preferences to remain economically active may stem from intrinsic satisfaction gained from the nature of the work and associated social community at work. A number of sociological factors may make work more attractive and encourage individuals to remain economically active as they age. Workers may be influenced in their preferences for work that conveys high status and provides a community of work colleagues in the workplace with whom they identify strongly. There is some evidence to show that older employees, compared to younger employees, put more emphasis on good relationships with colleagues, while income, advancement opportunities, job security and having an interesting job are less important (Drabe et al., 2015).

For older women, the decision to remain active in the labour market is also likely to be influenced by family commitments, especially those of a caring nature. Loretto and Vickerstaff (2015) argue that there has been a remarkable lack of attention paid to the role of gender in extending working lives. Firstly, there is little consideration of the relationship between gender and flexible working beyond the child-caring phase of life. Secondly, there is a tendency to assume that the end of working life and retirement are gender-neutral (see also Calasanti, 1996; Wright and Soutter, 2015). Based on a qualitative study of people aged 50+ in the UK, Loretto and Vickerstaff (2015) challenge some of the key assumptions underpinning the utility of flexible work in extending working lives, and suggest that the ways in which working in later life is constructed and enacted is different for men and women.

Given the cross-sectional nature of the QNHS data, it is not possible to establish causal linkages with any certainty. Our results therefore describe associations between measures and should be considered contingent and exploratory. Moreover, the QHNS dataset lacks measures that directly test respondent preferences for either greater income returns or extra leisure. Direct measures are also absent for assessing the role and influence of intrinsic work satisfaction and social networks in the choices of older workers to remain in the labour market. Consequently, in the following analysis, occupational level is used as a proxy for both the economic and sociological factors that influence individual preferences. Higher-level occupations such as the professions tend to be associated with both high instrumental rewards and interesting and high-quality work. Low-level occupations tend to be jobs associated with uninteresting work, poor working conditions and low extrinsic rewards. Thus, we examine (i) whether workers in higher-level occupations are more likely to remain economically active over the age of 50.

A preference to exit the labour market or remain inactive may arise from a higher value placed on leisure than income, particularly where economic circumstances are favourable, such as the availability of pension entitlements and early retirement opportunities. Workers in higher-level occupations are more likely to be in more financially favourable circumstances with pension entitlements than workers in lower-level occupations. In contrast, the economic circumstances of those in lower-level occupations may preclude them from early retirement from the labour market. These advantages for higher-level occupations will be particularly salient for older workers over the age of 60. Thus, it may be the case that (ii) older workers in lower-level occupations, particularly over the age of 60, are more likely to remain economically active than workers in higher-level occupations.

Few older men appear to avail of flexible work options, particularly part-time working. Most men work full time and then retire, with little evidence for gradual retirement (Hofacker, 2010). The most common form of flexibility is part-time working and women are markedly more likely to have worked part time across their life-course (Hofacker and Konig, 2013). Accordingly (iii) males over 50 are likely to have significantly lower levels of part-time working than women over 50.

Many women modify their hours in later life to undertake caring for elderly parents, an ailing partner, or grandchildren (Loretto and Vickerstaff, 2015). Such flexible work is often associated with low-skilled, low-paid jobs, with few prospects, particularly for the over-60s in Anglo-Saxon countries (Kalleberg et al., 2000; Lain, 2012; McGovern et al., 2004). For many women, there may be a strong propensity to escape into retirement if at all affordable, compared to men in full-time work. Indeed, it has been argued that part-time working in practice may actually inhibit temporal flexibility on the part of the employees, who feel they have to be available ‘on-call’ all the time (Dick, 2010; Rigby and O’Brien-Smith, 2010). As a result, we examine (iv) whether women over the age of 50 are more likely to exit the labour market than men over 50.

Moreover, many married, economically active women over 50 may still carry out a disproportionate share of domestic duties, particularly where children remain in the family unit (Gangel and Ziefle, 2009; Hakim, 2002; Yee Kan, 2007). Indeed, in the QNHS 2014, nearly 30 per cent of women in the 50 to 64 age group reported their main status as engaged in ‘home duties’, compared to only 0.5 per cent of men.

Responses are based on the International Labour Organisation (ILO) measure of respondent’s main status, as follows: ‘At work’; ‘Unemployed’; ‘Student’; Retired’; Unable to work due to disability/sick’; ‘On home duties’; ‘Other’.

Between 1998 and 2014, the labour market participation rate of the 50 to 64 age cohort increased from 52 to 66 per cent of all eligible people, driven in the main by the substantial increase in the participation rate of females in this age category (Table 1). Most of the increase occurred between 1998 and 2007. Disaggregating the older workers into five yearly groups indicates a general increase in each category of the economically active between 1998 and 2014. However, the proportion of people active in the labour market declined significantly between the ages of 50 and 65. In 2014, 77 per cent of the 50 to 54s were active compared to 69 per cent of the 55 to 59s and 48 per cent or less than half of the 60 to 64s. Over the period 1998 to 2014, there was a small overall increase (of four percentage points) in those economically active in the 65 to 69 category comprised of an increase of three percentage point for males and seven for females. Even so, slightly less than a fifth of the 65 to 69 age group were economically active in 2014.

Males are significantly more likely to participate in the labour market than females. Nevertheless, the rate of increase in the participation of women from 31 per cent in 1998 to 55 per cent in 2014 is substantially greater than the change for men from 72 to 76 per cent by 2014. The financial crisis in 2008 slowed the rate of increase, with a modest rise, from 2007 to 2014, of three per cent, solely as a result of increased female participation. The increase in the participation rate for men in all age categories between 1998 and 2014 was positive, thought relatively modest. In 2014, the proportion active in the 50 to 54 age group was 87 per cent, 79 per cent in the 55 to 59 age group, and 59 per cent in the 60 to 64 age group. By contrast, there was a significant increase in the proportion of women active in each age category between 1998 and 2014. The proportion of economically active females increased, between 1998 and 2014, from 42 to 67 per cent in the 50 to 54 age group and 30 to 58 per cent in the 55 to 59 category, and more than doubled from 17 to 38 per cent among the 60 to 64s. There appears to be no support for the proposition that women over the age of 50 are more likely to exit the labour market than men over 50. In 2014, the fall in the proportion of economically active males and females over the three age categories from 50 to 64 was relatively similar.

In 1998 the 50 to 64 age group accounted for 17 per cent of all economically active persons in the labour market between the ages of 15 and 64 increasing to 24 per cent by 2014 or just over half a million workers (Fig. 1). While the proportion of males increased by 6 percentage points between 1998 and 2014, females in the 50 to 64 age category increased by 11 percentage points. Thus by 2014 males accounted for 26 per cent of all economically active males between the ages of 50 and 64 and females for 23 per cent of all females participating in the labour market in the age range 15 to 64.

Figure 1

Comparatively an increase in the older workers occurred in the 27 countries comprising the European Union (EU) with the exception of Romania and Portugal between 2000 and 2010 in the 55 to 64 age group (Eurofound, 2012). By 2010 Ireland recorded above average rates of participation for the 60 to 64s and about average rates for the 55 to 59s (Eurofound, 2012). However, based on OECD figures Irish males and females had above the average participation rates for the original EU15 in 2010 (Taylor, 2013: 3-5).

This section examines the characteristics of the 50 to 64 age cohort who are economically active. Employers, as a proportion of the economically active in the 50 to 64 age category, declined between 1998 and 2014 from 11 per cent in 1998 to 7 per cent in 2014 (Table 2). The proportion of self-employed people active in the labour market also declined for this age group from 22 to 17 per cent in the same period, while the proportion of employees active in the labour market increased from 67 to 76 per cent. Thus, those classed as employees increased substantially as a proportion of the economically active in the 50 to 64 age group. As a proportion of the economically active, employees aged 50 to 54 increased from 71 to 80 per cent between 1998 and 2014, 66 to 76 per cent in the 55 to 59 group and 57 to 67 per cent in the 60 to 64 category. Even so, those classed as employers and self-employed tended to increase as a proportion of the economically active in the older age categories, particularly in 1998. Overall, the trends indicate that increasingly, older workers are more likely to be employees and less likely to be employers or self-employed in 2014, compared to 1998.

In Table 3, occupations are sorted into three main groups: professional jobs, routine white-collar and skilled jobs, and lower-service and manual-type jobs. Professional-type jobs for all the economically active from 15 to 64 increased from 36 to 38 per cent between 1998 and 2014; middle-level jobs remained stable; and service/manual-type jobs declined from 38 to 36 per cent. However, the trend among the 50 to 64s reflects a different pattern, with professional-type jobs within this age category decreasing from 47 to 35 per cent of all occupations. However, middle-level jobs as a proportion of all jobs increased from 19 per cent in 1998 to 31 per cent in 2014, while service/ manual-type jobs remained at 34 per cent over this period. This provides scant support for the suggested proposition that workers in higher-level occupations are more likely to remain economically active over the age of 50. Indeed, while the proportion active in lower-level occupations remained stable, the -proportion active in professional type jobs declined by a significant amount.

In 2014, the decline in the proportion of professional-type jobs was greatest for the 60 to 64 age category. The proportion in middle-level jobs increased substantially, while the proportion of service/manual jobs also increased moderately with age, in 2014. These patterns provide some support for the alternative position that older workers in lower-level occupations, particularly over the age of 60, are more likely to remain economically active than workers in higher-level occupations.(though not to the same extent as middle-level occupations).

It is generally held that older workers favour more flexible forms of work as they move towards retirement. The most common form of flexible work is part-time working. The trend in part-time working has increased for the 50 to 64 age category from 21 per cent of employees (excluded are employers and the self-employed) in 1998 to 28 per cent in 2014 (Table 4). This increase is associated with a rise in the proportion of men working part time from 8 to 13 per cent while the proportion of women remained relatively stable at just over 40 per cent.

Part-time working tends to be highest for the 60 to 64 age group, rising from 26 per cent of the 50 to 59s to 29 per cent for the 60 to 64s. For men, there was a steady increase across the age categories from 9 per cent for the 50 to 54s to 21 per cent for the 60 to 64s in 2014. By 2014, over 50 per cent of female employees in the 60 to 64 age group worked part time – an increase of six percentage points since 1998. Part-time work remains overwhelmingly female, despite the modest increase of older men working part time, particularly in the over 60s.

In Table 5, binary logistic regression is used to explore the impact of gender, education and marital status on the probability as measured by the odds ratio of people remaining economically active in the labour market over the age of 50, based on the 2014 QNHS dataset. Education is measured using six different levels: (1) primary or lower level of education (the referent measure); (2) Junior Certificate level; (3) Leaving Certificate level; (4) post-Leaving Certificate; (5) higher certificates and diplomas; and (6) higher-education levels (honours degrees and postgraduate degrees, including PhDs). Controlling for different levels of education and marital, status men are over three times more likely to remain in the labour market than women in the 50 to 64 age group. In general, increasing levels of education are associated with a greater likelihood of being active in the labour market. Compared to those with primary/lower education, respondents with a degree or a higher qualification are over five times more likely to be active, and those with higher certificates and diplomas are almost four times more likely to be active. In particular, higher levels of education have a greater impact for women than men on the likelihood of remaining active in the labour market. Women with higher-level qualifications are almost seven times more likely to be active, compared to females with primary/lower education, while males are four times more likely to be active. Females with a post-Leaving Certificate qualification are five times more likely to be active, compared to females with primary/lower-level education, while males are only twice as likely to be active.

For the discrete age categories, and controlling for education and marital status, men are five times more likely than women to be active in the 50 to 54 age group, and those with a higher level of education are almost 13 times more likely to be active than respondents with only primary/lower education. However, the impact of education, and to a lesser extent gender, declines for the 55 to 59s and particularly the 60 to 64 age group. Indeed, higher levels of education have no significant effect on the likelihood of people remaining active in the labour market, compared to respondents with primary/low educational levels for the 60 to 64 age group. It appears that those with higher-educational levels are more likely to exit the labour market between 60 and 64 at a faster rate than respondents with Junior- to post-Leaving Certificate levels of education.

In Table 5, marital status and children remaining in the family unit are used to measure family responsibilities. Being married has no significant impact on the likelihood of remaining active in the labour market for the 50 to 64 age group. However, the presence of any children remaining in the family unit increases moderately (1.5 times) the likelihood of remaining economically active. Married women, compared to single/widowed women in the 50 to 64 age group, are less likely to remain economically active, though the relationship is relatively weak (-1.3 times), while married men, compared to single men, are 1.6 times more likely to remain active. The presence of children in the family unit increases the probability of men remaining active (1.8 times) to a greater extent than for women (1.2 times). Thus, it appears that there is some support for the proposition that married women are more likely to exit the labour market than single/widowed women; though the presence of children in the family unit has a modest positive, rather than negative, impact on the likelihood of remaining active. By contrast, married men in the 50 to 64 age group with children remaining in the family unit are more likely to stay active in the labour market.

Across the three discrete age categories 50 to 54, 55 to 59 and 60 to 64, there is no significant relationship between being married and having children in the family unit and the probability of remaining active in the labour market.