Factors influencing workers to continue working until retirement age

About 40% of employees in the Netherlands report that they are able to work until the age of 65 years, but only around 20% of all employees are willing to do so. Furthermore, only 13% are both willing and able to work until they are 65 years old. Health and working conditions play an important role in this regard. These conclusions are drawn from the 2005 Netherlands Working Conditions Survey, carried out among 23,400 Dutch employees.

Between 1993 and 2004, the labour force participation rate of younger workers (15-24 years old) in the Netherlands was stable at around 40%. In the 25-49 year age group, the participation rate rose from 70% to 79%. However, the most remarkable finding relates to the oldest age group (50-64 years) where the participation rate increased from 36% to 51%.

In many European countries, the so-called ‘Baby Boom’ generation, born between 1946 and 1964, is starting to grow old and a large proportion will be leaving the labour market in the coming years. National governments across the EU are recognising that older workers are becoming more important to the European economy. Their participation in the labour market helps to maintain the size of the labour force, productivity, and sustainable social welfare and pension systems. However, the workers themselves have their own views on their working life future (Figure 1).

Figure 1: Proportion of employees able and/or willing to continue working until 65 years of age (% of all employees)

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Source: NEA, 2005

The 2005 Netherlands Working Conditions Survey (Nationale Enquête Arbeidsomstandigheden, NEA) asked employees - among other things - whether they were willing to work until the official retirement age of 65 years, and whether they were able to do so. The NEA was carried out in November 2005 among a representative sample of 23,400 employees by TNO Work and Employment (Nederlandse Organisatie voor toegepast-natuurwetenschappelijk onderzoek, TNO), in cooperation with Statistics Netherlands.

Figure 1 shows that 13% of all Dutch employees are willing and able to work until retirement age. However, 24% are neither willing nor able to do so. About 19% are either willing but not able, or able but not willing to work until retirement age. The remainder of the employees, 44%, do not know.

Health as a factor in willingness to stay in work

The analysis seeks to distinguish certain work characteristics among those who want to continue working until retirement age and those who do not. First, there are no large differences between men and women. However, as they grow older, workers have more definite opinions about continuing to work. Thus, younger employees say ‘don’t know’ far more often than older employees do. Older employees are more inclined to state that they want to stop working.

A prominent personal characteristic in predicting work continuation is the employee’s health, as shown in Figure 2. About 20% of employees with excellent health want to continue working and 16% want to stop. Among employees with bad health, only 4% want to keep working and 42% want to stop working. Thus, health appears to be a major predictor of likelihood to stay in work.

Figure 2: Proportion of employees able and willing to continue working, in relation to their health status

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Source: NEA, 2005

Working conditions as a factor in willingness to stay in work

Working conditions also play an important role in the prediction of working until retirement age. Certain factors are related to the inclination to stop working, when possible, before people reach retirement age. These include working with a low level of job autonomy, working in a noisy workplace, and having to carry out physically heavy work or emotionally demanding work - as is the case in education and health care.

In this context, one of the most significant aspects of working conditions appears to be the pressure of work (Figure 3). The greater the work pressure, the more employees want to stop working before they are 65 years old, and the less they want to continue working.

Figure 3: Proportion of employees able and willing to continue working, in relation to their level of work pressure

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Source: NEA, 2005

Conclusions

In the Netherlands and in many other European countries, the ‘Baby Boom’ generation will be leaving the labour market in the coming years. This implies that participation of older workers is becoming more important to the European economy. Earlier studies concluded that flexible working hours, part-time work and more extensive leave arrangements may motivate older workers to continue working until the official retirement age. The present data indicate that employers may also be able to encourage employees to stay working by offering good working conditions.

Peter Smulders, TNO Work and Employment

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