Can extending work lives be a solution to the challenges of an aging society? Increasing the retirement age could lead to more people contributing to the pension system. However, there is limited knowledge about work life in Germany.
Researchers from the Max Planck Institute for Demographic Research (MPIDR) and the Federal Institute for Population Research have conducted a study to examine changes in work life in Germany and the impact of labor market and pension reforms.
Christian Dudel, Deputy Head of Labor Demography at MPIDR, led the research team and analyzed data from the German Microcensus. The study aimed to determine the effectiveness of policy measures designed to extend work lives for individuals integrated in the labor market with high income and stable employment.
The study focused on birth cohorts from 1941 to 1955 and analyzed working ages from 55 to 64. The research observed changes in work life from 1996 to 2019 in both eastern and western Germany, considering gender, level of education, and professional qualifications.
Positive Trends in Work Life
The study revealed that work life expectancy in Germany has increased for all cohorts, educational levels, and occupations, irrespective of gender. However, significant disparities in work life length were observed, with highly educated West German men having the longest work lives.
On average, these men work three times longer than women with low educational attainment in eastern Germany. Nonetheless, East German women overall have longer work lives than women in West Germany, partly due to historical differences between the two regions.
Dudel explained that while older workers are staying in the labor market longer, participation rates are rising slowly for individuals with low levels of education and low-skilled occupations.
Challenges for Low-Income Individuals
Historically, the focus in Germany was on making early retirement attractive, rather than preventing individuals from being forced out of the labor market as they age. Dudel emphasized the need for future policies that enable people to work longer without exacerbating inequalities between different worker groups, especially those with low educational attainment.
The upcoming retirement of baby boomers may impact the labor market, but the increasing education level of individuals born after 1955 could potentially extend work life. However, evidence from other countries suggests that the increase in work life expectancy may soon plateau.
The study is published in the journal Demography.
More information: Christian Dudel et al, The Extension of Late Working Life in Germany: Trends, Inequalities, and the East–West Divide, Demography (2023). DOI: 10.1215/00703370-10850040
Provided by Max-Planck-Institut für demografische Forschung
Citation: Work life is getting longer in Germany, but there are big differences (2023, July 19) retrieved 20 July 2023 from https://phys.org/news/2023-07-life-longer-germany-big-differences.html
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