An increase of the retirement age increases the labour force participation of older workers, but the effect on the health and wellbeing of older workers is unclear

Pilipiec P , Groot W, Pavlova M. The effect of an increase of the retirement age on the health, well-being, and labor force participation of older workers: A systematic literature review Journal of Population Ageing. 2021;14:271-315.    

Review question

What are the effects of an increase in the retirement age on the health, well-being, and labour force participation of older workers?

Background

An aging population leads to an increase in the number of working aged people necessary to support each person aged 65 or older. This can put a financial strain on public-pension programs.

In order to financially sustain public-pension programs, an increase in the legal retirement age and the age for eligibility to pension benefits is suggested. This increases the workforce by employing more older workers and increases labour-tax revenues.

Workers may experience more difficulties working at an older age. They may need additional support and may be more likely to have disabilities and other health problems.

How the review was done

A detailed search of a number of electronic databases was conducted for studies published from 2000 and on. Studies that focused on older workers (age 45+), work participation beyond the retirement age, health, wellbeing, and labour-force participation were included.

A total of 4,927 unique studies were identified in searches and 19 were included in the review after assessments for eligibility.

This study was funded by the Maastricht Graduate School of Governance at Maastricht University (the Netherlands).

What the researchers found

An increase in the retirement age had a positive effect on health promoting behaviours and satisfaction with health. However, delayed access to pension benefits reinforces health inequalities.  This finding could be due to a selection bias, where healthier workers are able to work past the retirement age.

The findings on wellbeing, measured by job satisfaction, were inconsistent. An increase in job satisfaction could be due to selection bias, where more satisfied workers continue to work past the retirement age. A decrease in job satisfaction can be due to the perception that increased years of working for the same amount of pension benefits is unfair.

Labour-force participation increases with an increased retirement age. After public-pension reforms that increased the statutory retirement age, the expected and preferred retirement ages of people studied also increased.

Conclusion

An increase of the retirement age increases labour-force participation among older workers. However, there is no consistent evidence on the impact of retirement age on the health and wellbeing of older workers. This can be due to studies investigating only certain aspects of health and wellbeing.  More research is needed to investigate the effects of an increase of the retirement age on the health and wellbeing of diverse groups of older workers.