Figures published in May 2004 by the Federal Ministry for Family Affairs, Senior Citizens, Women and Youth (Bundesministerium für Familie, Senioren, Frauen und Jugend, BMFSFJ) indicate that more and more workers are planning to work longer than they had previously intended. The figures are drawn from a study [1] that forms part of a larger survey on old age, entitled 'Planned and actual retirement ages', commissioned by the Ministry. According to the study, the proportion of workers aged 40 and above who wish to retire at 60 at the latest has declined to 35% - in 1996, the figure was 50%. At the same time, the study, which was carried out by the German Centre of Gerontology (Deutsches Zentrum für Altersfragen, DZA [2]), finds that workers do not have any clear idea of how much longer they wish to work.[1] http://www.bmfsfj.de/Kategorien/Presse/pressemitteilungen,did=18272.html[2] http://www.dza.de/
In May 2004, the German Federal Ministry for Family Affairs, Senior Citizens, Women and Youth published figures indicating that more and more workers, both male and female, are planning to work longer than they had previously intended. According to the Ministry, the percentage of workers aged 40 and above who wish to retire at 60 at the latest declined from 50% in 1996 to 35% in 2002.
Figures published in May 2004 by the Federal Ministry for Family Affairs, Senior Citizens, Women and Youth (Bundesministerium für Familie, Senioren, Frauen und Jugend, BMFSFJ) indicate that more and more workers are planning to work longer than they had previously intended. The figures are drawn from a study that forms part of a larger survey on old age, entitled 'Planned and actual retirement ages', commissioned by the Ministry. According to the study, the proportion of workers aged 40 and above who wish to retire at 60 at the latest has declined to 35% - in 1996, the figure was 50%. At the same time, the study, which was carried out by the German Centre of Gerontology (Deutsches Zentrum für Altersfragen, DZA), finds that workers do not have any clear idea of how much longer they wish to work.
Federal Minister Renate Schmidt noted that: 'The tendency, particularly within the world of work, to filter people out of positions of responsibility and inclusion at ever earlier ages is, nowadays, no longer appropriate.' She went on to say that: 'Demographic developments mean that, in future, social and economic problems will only be able to be resolved if everyone - that includes older persons - participates [in work]. The great upheaval that we are currently experiencing in the world of work means that it is no longer possible to plan employment biographies in the same way that it was one or two decades ago. Those in employment have changed their life plans in response to the changed realities. It is beneficial if young and old workers, male and female alike, are equally represented within the world of work. In the past, the experience and specialist knowledge of older persons has often been called upon too rarely. The Fifth Report on Old Age, which the federal government will publish in summer 2005, will also focus on ways to improve the integration of older persons into economic and social life.'
Study findings in detail
According to the new DZA study, male and female workers have, in the last few years, altered considerably their expectations of when they expect to enter retirement - see table 1 below. The percentage of employees aged 40 and above who wish to retire at 60 at the latest fell between 1996 and 2002 from 50.3% to 35.0%. At the same time, the proportion of those who cannot make any concrete statements about when they plan to retire increased over the same six-year period from 18.3% to 31.6%. In 2002, a clear majority (65%) of those asked assumed that they will work longer in order to attain a better income in their retirement.
| . | 1996 | 2002 |
| At 60 or earlier | 50.3 | 35.0 |
| At 61 to 64 | 12.7 | 13.6 |
| At 65 or later | 18.7 | 19.9 |
| Don't know | 18.3 | 31.6 |
Source: DZA 2004.
The tendency to reject an early exit from the world of work has been more pronounced among women than among men, and in western Germany more than in eastern Germany - see table 2 below. The proportion of employed women in western Germany surveyed who plan to retire at 60 at the latest declined between 1996 and 2002 by 21 percentage points to 36.3%. For employed women in eastern Germany, this figure decreased by 20.2 percentage points to 55.3%. However, for employed men in western Germany there was a reduction of only 14.1 percentage points to 35.2%, and for employed men in eastern Germany there was even a slight increase in this figure, of 2.6 percentage points to 32.5%.
| Planned exit age | Men in western Germany | Men in eastern Germany | Women in western Germany | Women in eastern Germany | ||||
| 1996 | 2002 | 1996 | 2002 | 1996 | 2002 | 1996 | 2002 | |
| At 60 or earlier | 49.3 | 35.2 | 29.9 | 32.5 | 57.3 | 36.3 | 75.5 | 55.3 |
| At 61 to 64 | 16.2 | 11.9 | 7.1 | 4.9 | 6.8 | 12.6 | 5.4 | 12.3 |
| At 65 or later | 20.3 | 22.0 | 46.4 | 35.0 | 8.0 | 12.0 | 10.3 | 12.3 |
| Don't know | 14.2 | 30.9 | 16.5 | 27.6 | 27.9 | 39.1 | 8.7 | 20.2 |
Source: DZA 2004.
One reason cited for this development might be the increase from 60 to 65 in the age from which it is possible for women to take 'regular' retirement. Women have adapted their subjective behaviour to the increase in the regular retirement age to a greater extent than men have. They, more often than men, cite a concrete planned retirement age between 61 and 65.
Men plan to retire, on average, at the age of 62 and women at the age of 61.1. The report indicates that increases in the ages from which employees can take early retirement and the increasing importance of retirement ages have only very slowly begun to emerge as new issues around which those aged between 40 and 60 orientate their retirement plans. At the same time, some of those questioned in the survey continue to have 'unrealistic' early retirement plans that, presumably, either cannot be realised or can be achieved only if they accept considerable reductions in their pensions.
Commentary
Germany has a low employment-to-population ratio for people between the ages of 55 and 64 (DE0310106F). Only 38.4% of inhabitants between the ages of 55 and 64 were still in employment in 2002, compared with nearly 50% some 30 years previously. Germany's low employment rate of people aged 55 to 64 can be explained by the considerable promotion of early retirement and early labour market exit up to the mid-1990s. Developments abroad prove that it is possible to achieve a considerably higher rate of employment amongst older workers. This is shown, for example, by countries such as Sweden, Norway or the USA, where about 60% to 70% of inhabitants of this age group work. However, to achieve such high employment rates for older workers, further important changes in the incentive structure are needed. If market-based policies are to be pursued to increase the employment-to-population ratio amongst older people, three starting points appear to be of central importance: a lower level of labour market regulation; changes in pension systems and other de facto early retirement programmes in order to make early exit from the labour market more difficult and financially less attractive for both employees and employers; and higher investments in existing human capital in order to avoid the erosion of skills and improve the employability of (future) older workers. (Lothar Funk, Cologne Institute for Business Research, IW)
Eurofound recommends citing this publication in the following way.
Eurofound (2004), Employees prepare for longer working lives, article.
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