Better-educated older people less likely to retire early

Bo Hansen, Claus

Overview

Article

Better-educated older people less likely to retire early

Published: 29 April 2004

Claus Bo Hansen

Ageing workforce

The report from Statistics Denmark [1] is based on data from the Danish Labour Force Survey [2] and examines how older workers differ from 30-54 year olds in a range of labour market related aspects. Older workers are classified as belonging to three age categories: 55-59 years, 60-66 years and 67-74 years. It is the first time that data on 67-74 years olds have been included in a study of this kind, as this age group has been represented in the Danish Labour Force Survey only since 2001.[1] http://www.dst.dk/[2] http://www.dst.dk/homeuk/guide/varedeklarationer/emnegruppe/emne.aspx?sysrid=857&timespath=4|

A new report, ‘Seniors and the labour market’ , reveals a significant link between level of education, type of job and retirement age. The report, published by Statistics Denmark in January 2004, shows that 52% of people with a higher education in the 60-66 year age group are still working. This is three times as many as persons in the same age group who have only a primary school education.

The report from Statistics Denmark is based on data from the Danish Labour Force Survey and examines how older workers differ from 30-54 year olds in a range of labour market related aspects. Older workers are classified as belonging to three age categories: 55-59 years, 60-66 years and 67-74 years. It is the first time that data on 67-74 years olds have been included in a study of this kind, as this age group has been represented in the Danish Labour Force Survey only since 2001.

Employment rate of older employees

The employment rate among older employees in Denmark is relatively high compared with other EU countries. In 2002, 57.3% of 55-64 year olds were working, which means that Denmark has already fulfilled the EU’s 2010 target of a 50% employment rate among older workers. In the EU, only Sweden has a higher employment rate (68.3%) among 55-64 year olds.

Not surprisingly, the employment rate decreases significantly with age. The report shows that while 88.7% of men and 81.3% of women in the 30-54 year age group are working, the equivalent figure among 60-66 year olds is 36% for men and 18% for women. Furthermore, data reveal that the employment rate among men is higher than among women and that the gender gap increases with age.

**Employment status by age and gender (%)**
Employment by age and gender
	30-54 years			55-59 years		60-66 years		67-74 years
	Men	Women		Men	Women	Men	Women	Men	Women
Employed	88.7	81.3		80.1	67.7	36.0	18.0	9.4	3.3
Unemployed	3.4	3.6		3.5	3.7	0.7	0.4	0.1 *	0.1 *
Out of the labour force	7.9	15.1		16.4	28.6	63.3	81.6	90.6	96.7
Total	100	100		100	100	100	100	100	100

Number of persons	970,000		967,000	185,000	173,000	198,000	178,000	142,000	163,000
* Note: Denmark has no statutory retirement age. However, eligibility for social old age pension is reached at 65 years. Source: Statistics Denmark, De ældre og arbejdsmarkedet, Copenhagen, 2004, p. 5.

Influence of educational level

The employment rate among 60-66 year olds with a university education is 52%, whereas just 16% of persons in this age category who have primary school education only are working. As the table below illustrates, this gap increases with age.

**Employment rate by educational level and age (%)**
Employment by education and age
	30-54 years	55-59 years	60-66 years	67-74 years
Primary school level	70	58	16	4
High school level (10-12 years of education)	87	75	30	5
Short higher education (12-14 years of education)	87	81	37	13
Medium higher education (15-16 years of education)	90	86	39	10
Long higher education (17-18 years of education)	94	91	52	19
Total	85	74	27	6
Source: Statistics Denmark, De ældre og arbejdsmarkedet, Copenhagen, 2004, p.12.

There are various reasons to explain why older people with low educational levels retire early. First of all, they enter the labour market much earlier than people with a higher education, which is reflected in the retirement age. In addition, the motivation to stay longer in the labour market is stronger among older persons with high educational levels, due to the fact that they often have a better salary and less physically demanding work.

Influence of occupation

Looking at the link between occupation and retirement age, the categories of high-level management, high-level work and agricultural work differ distinctively from other occupational categories. The relative percentage of employees in these three occupational groups increases with age, except for a small decrease of one percentage point in high-level management among 67-74 year olds. Up to half of 67-74 year olds are working in high-level management, high-level work or agricultural work, whereas the share is only 29% among 30-54 year olds.

**Break-down of employed persons by occupation and age (%)**
Employment by occupation and age
	30-54 years	55-59 years	60-66 years	67-74 years
Manufacturing, process- and machine operator work	18	18	18	7
Office work and sales- and service work	22	22	19	11
Medium-level work (requiring mid-level competencies) *	23	20	14	11
Work in agriculture	2	2	7	16
High-level work (work with a high degree of responsibility or requiring special competencies) *	16	16	15	21
Top-level management (CEOs, top level civil servants etc.) *	9	10	14	13
Other work	12	12	13	20
Total	100	100	100	100

Total number of persons	1,647,000	266,000	104,000	19,000
* Note: Occupational categories in the table are constructed on the basis of a job status classification that is part of DISCO, the Danish version of the International Standard Classification of Occupations (ISCO). Source: Statistics Denmark, De ældre og arbejdsmarkedet, Copenhagen, 2004, p.10.

Eurofound recommends citing this publication in the following way.

Eurofound (2004), Better-educated older people less likely to retire early, article.