Woman, training and work

Gender! A Partnership of Equals
Geneve: International Labour Office, 2000. 115 p.

 

Retirement
A labour market in transition

The problem

Working longer and retiring later while paying higher contributions for reduced pensions, is a possible near-future scenario. With fertility declining and life expectancy increasing, the world's population is aging much faster than previously, leading to a significantly larger population of pension-age people. This, in turn, will most likely lead to a deficit in available funds for pension payments...Unless a solution is foreseen now.

These developments imply other direct consequences for the labour market also. As the supply of young entrants shrinks, the older workforce will have to remain in the labour market longer to fill all the jobs. Thus, the viability of early retirement policies is now in doubt. Instead of a reduced labour supply, prolonging working life will increase it. This is a subject high on the political agenda and of much concern. Nevertheless, the trend toward an aging workforce will also have to be accompanied by a change of attitude towards the older workers - women in particular - and active rather than passive policies for boosting their training, productivity and decency of work.

The issues

Women's transition to retirement differs from that of men because of their different place in the labour market. Employment rates for older women are still lower than for older men, although the rates for men have substantially declined due to early retirement policies. On the other hand, rates for younger women have increased substantially. Because of their family responsibilities, women tend to have more breaks in their professional careers.They are also largely employed in the service sector, with a high proportion of part-time jobs and other forms of flexible employment. Therefore, access to pensions, usually based on full-time, continuous work, is more difficult for them.

Pension levels are also lower for women than for men, and they are under-represented in early retirement schemes. However, in some countries the statutory age of entitlement is still lower for women than for men. But reforms are underway in others, whose aim is to equalize pension ages between the sexes. However, far- reaching changes still need to take place in their pension provisions in order to achieve equal pension rights for men and women.

In some countries women receive preferential treatment in terms of the age at which they qualify for a state pension. Historically, the retirement pension was awarded on a family basis; the father was normally the family breadwinner, while the mother cared for the home and family. Why did women obtain pensions at a lower retirement age? Perhaps to compensate them for the years they spent outside the labour force caring for children. It may also be based on "traditional" thinking that older women are physically weaker than older men. It may also be a way to compensate women, since in earlier generations they derived less satisfaction from employment because of the kinds of jobs they had access to. Today, however, women are ever more eager to work and are occupying increasingly attractive jobs. Thus, it seems that there is no longer a rationale behind different retirement ages for men and women.

In the past, women's participation in early retirement schemes has been low in relation to their share of total employment. During the 1970s, the retirement age was generally 60. Early retirement programmes were targeted at declining manufacturing industries, whose work forces were predominately male. Thus, even when age conditions did not prevent women from taking early retirement under government schemes, the targeting of manufacturing made it harder for women to avail themselves of such schemes.

In some countries, equalization has been achieved mainly by raising women's pension age to that of men. However, women still encounter difficulties in accessing pension schemes because, as noted previously, their paid and unpaid work patterns do not conform to that of long-term, continuous participation in paid work on which entitlement to those schemes is based.

A common rule in both state- or employer-sponsored national schemes and employer-sponsored company schemes is the requirement of a minimum period of membership before rights are acquired. This places women at a disadvantage, as can the reference salary on which pension benefits are based. For example, if a woman ends her career in a part-time job and her salary in her last job is the one used as a pension reference, she will have severely reduced pension benefits.

In some countries there are rules which compensate women for the difficulties they encounter in gaining access to adequate pension provisions. Some focus on sex or marital status, or a combination of the two. Provisions falling within this category include different pension ages, survivors' benefits, dependency allowances and derived rights. Other rules make special provision for those providing care for others.

The advantage of such rules within a pension system is that they enable women (and men) without a history of full-time, high-paid work to secure an adequate retirement pension income. However, compensation for care provision does not protect the pension position of workers (women and men) engaged in part-time, non-continuous, low-paid work. The expansion of flexible forms of employment makes it likely that the numbers of such workers will increase rather than decrease in future years, thereby increasing the number of people with insecure or inadequate pension rights.

What can be done?

Reversing the trend toward early retirement seems, on the one hand, to be a rational answer to the problem of aging. On the other hand, restricting access to early retirement, but continuing present lay-off policies in the wake of globalization and associated mergers, acquisitions and restructuring, might simply result in more unemployment at the end of a working life.

Policy recommendations Companies should ensure adequate training for their older workers, adjusted to their particular needs Flexible working-time and team work may also address the needs for both productivity and decent work Employers should be convinced that it is in their interest to maintain their older workers in their jobs Governments should provide incentives to firms which maintain older workers and provide them with training Carefully designed, progressive retirement systems should be devised which allow employees to work part-time in their last working years without losing their full pension entitlements Part-time workers who have had difficult working conditions or those with long contribution periods should not be excluded from the benefits of retiring early

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