How to plan 100 years of life - Population Europe Event in Brussels
Increasing the effective retirement age alone will not be sufficient to meet the demographic challenges and maintain economic prosperity in Europe’s ageing societies. Given that current and future generations can expect increasingly long lives, it will be essential to rethink the organisation of working life as such. One idea is to redistribute work across the life-course so that people stay longer in the labour force, but also have more time to care for their families. On November 20,leading scientists, policy makers, and civil society representatives discussed current limitations and challenges of new concepts at a conference in the Bavarian Representation in Brussels, organised by Population Europe and the University of Rome "La Sapienza".
Raising the age alone is not enough
Graziella Caselli, Honorary Professor of Demography at the University of Rome "La Sapienza" and co-organiser of the Population Europe event welcomed participants, pointing out one of the positive aspects of population ageing: "It could frequently become the case that people move into retirement whilst one or both of their parents are still alive." A major problem she perceives is the exclusion of older people, and particularly women, from employment. "We need flexible and appropriate working conditions. Raising the age alone would not be sufficient."
How to make a pension system feasible is a question examined by Fritz von Nordheim, Deputy Head of the Unit "Active Ageing, Pensions, Healthcare, Social Services" at DG Employment, Social Affairs and Inclusion at the European Commission. In his presentation he focused on the policy perspective of adequate, safe and sustainable pensions. He is certain that "Europeans will have to work more and longer and they will have to save more". According to Nordheim, thus far there has been an imbalance of years in work and retirement: "Since 1960 we spent around 15 years less in employment, roughly due to five years longer in education, five years earlier retirement and five years gained in longevity." Apart from that there has been a transition "from the boomers to the busters" and people having fewer children, and these developments “keep pension planners awake at night”. In the future, he sees a "greying" labour market. "Only the group of 50+ will grow, and if there is no labour market for them a large amount of labour will be gone. The labour market has to come up with ideas to employ ageing workers."
Dead men and sick women?
James W. Vaupel, Director of the Max Planck Institute for Demographic Research began his presentation with a thought: "Most French kids born after 2000 will celebrate their 100th birthday. If you knew you would live for 100 years, would you want to live your life the way we used to?" In the future, he sees more progress in terms of medical support, and more progress in slowing down the rate of ageing. The years we are gaining, according to Vaupel, are most probably healthy years, even though there is a difference between men and women. Women spend more years with long term disabilities, while men still die earlier. "Dead men and sick women – that will be the future!" he joked. But he still is optimistic: "More people will be in the labour market, people will work till older ages, but fewer hours a week, and men and women will contribute equal hours of unpaid work. This is the future that I see for our children, a very prosperous future!"
We need to reform the labour market
Tommy Bengtsson, Director of the Centre for Economic Demography of Lund University, presented facts and figures from European labour markets. For Bengtsson, higher life expectancy is not only a numbers issue but also "a money and a cost issue". Public consumption, mainly consisting of healthcare consumption, increases later in life, and therefore Bengtsson sees an approaching deficit in the life cycle: "The deficit will grow with a factor of at least five instead of three. What can we do against that? We know that labour immigration cannot solve these problems and that a natural increase in population through more births takes too long. And an increase in the level of taxes is unlikely to be a feasible solution due to global competition." So, in his mind there is only one answer: "There should be possibilities to increase working hours at all ages, which must be matched by increasing capital stock." Still, he is sure that "the big issue in Europe today is not pensions, it is unemployment. We need to reform the labour markets so we can meet the global demand".
The almost ideal pension system
Gustavo De Santis, Professor of Demography at the University of Florence, challenged participants by presenting the theoretical framework for what he termed "“the almost ideal pension system". It is comprised of a limited number of variables in which policy decisions can be made. Once in place, these variables will ensure that future changes in both the economy and demographic developments will not harm the system’s functionality. The retirement age would not be fixed, but calculated according to a life table in any given year. Individuals would also not be able to rely on a fixed pension benefit, as this would also vary depending on the level of net earnings. However, according to De Santis, “the system is the same for everybody and is constructed in such a way as to be able to go on forever, unchanged, under all possible circumstances. It never needs ad hoc adjustments, policy interventions or periodic revisions by ‘experts’, forecasts or anything of this kind”.
From a family and gender perspective
Francesco C. Billari, Head of Department of Sociology at Oxford University, moved the discussion to the family and life-course perspective. "Active ageing should not only be about the elderly and pensions, it is also about families and the gender balance," he said. For Billari there is a positive relationship between fertility and well-being, and therefore "fertility is high only where it is compatible with well-being, and the more gender equality there is in a society, the higher the fertility rate is". He emphasised that "we need policies that help women to get back in the labour market". But it is not only about jobs: "Unpaid work is also unequally divided." Here he quoted Gøsta Esping-Andersen, saying that we have an “incomplete revolution” if men and women don’t close the gender gap in fields like domestic labour.
To find guidelines for policies Billari believes that, first of all, "we need more family-oriented, longitudinal, comparative data". Apart from that, policies should not try to fight the trends – the gender revolution is irreversible, and "no one will bare children because it is good for the state". To remove the obstacles, he recommends the feminisation of men (versus the masculinisation of women). Also the “extensive investment in childcare and schools” is inevitable.
Public debate
The closed meeting was followed by a public debate moderated by Sigrun Matthiesen (Population Europe), in which Francesco Billari, Fritz von Nordheim, Axel Börsch-Supan (Director of the Munich Center for the Economics of Aging (MEA), Max Planck Institute for Social Law and Social Policy), Claudia Menne (Confederal Secretary of the European Trade Union Confederation), and Rebekah Smith (Senior Adviser for Social Affairs, BUSINESS EUROPE) discussed further consequences of population ageing for the labour market and society.
Axel Börsch-Supan pointed out that "demography and ageing are not only about the elderly, it’s about society as such". He also stated that "everything with redistribution gets me worried for one reason: unemployment. Youth employment is certainly a more important problem than the rush hour of life right now". In his view, the solution is to create more labour. He also supports a different working system for older people: "It should be possible start a new job at the age of 50, or do some extra training."
Fritz von Nordheim addressed another important topic: life cycle transfers. "Sweden is one of the best cases in many areas, but even they have a deficit on their life cycle transfers. The Danes have the same problem. We need to check if life cycle transfers really work out."
For Claudia Menne the most important dimension is the redistribution between genders, between unpaid and paid work, and between younger and older workers. "We need to shape working conditions so older people can stay in the labour market," she said. She also discussed the problem of young people in ageing societies: "In fact there are not only a lot of jobless young people, but many of those who have a job work in very insecure conditions."
Rebekah Smith said that "the only way to save pensions is through a longer working life; the money just won’t be there earlier". She is certain that there is also a willingness to work longer, but "there is a need to have labour markets that are working effectually". Generally she sees a need for more responsibility from both employers and employees towards continuing lifelong learning, and offering more flexible scheduling in order to keep employees in the workplace.
If you are interesten in further information, please find the presentations of all speakers underneath.