Keeping Australia's older workers in the labour force. A policy perspective

Australian Journal of Social Issues, Winter, 2008 by Maggie Walter, Natalie Jackson, Bruce Felmingham

This result is important because it indicates that the substantial number of respondents willing to consider working longer are also those most likely to be influenced by policy measures, both incentives and disincentives. Encouraging them to move from willing to consider to actually extending, working life, might rely on the right policy measures being put in place.

Conclusion

These findings strongly suggest that older Australian workers will be prepared to change their retirement plans in response to policy encouragement. While older workers' retirement attitudes may have been formulated when early retirement was the norm, such workers now appear not only to be heeding Government concerns about the ageing population, but be taking these into consideration when planning their own retirement. The Government's message on later retirement has got through to a substantial proportion of the older Australian workforce. However, the efficacy of the current policy tools in place to translate this message into action is less supported. The removal of taxation from the superannuation entitlements of those aged 60 Or over seems likely to extend working lives at least to the entitlement age of 60. The Pension Benefit Scheme and transition to retirement measures do not appear as influential on retirement intentions. In the case of the latter the measures could actually reduce, rather than increase, the labour market participation of older workers.

In short, older workers recognise that the ageing population raises unique difficulties for the nation, yet are, as yet, relatively unresponsive to current policy incentives. What policies might better reinforce the Governments' message on deferring retirement among older workers? The results of this study suggest that policy makers need to cast their policy net more widely. As shown, those most willing to consider deferring retirement are also those most likely to respond positively to policy initiatives, especially incentives, to work longer. As importantly, financial incentives are not the only, or even necessarily the primary, motivating factor for older workers. In this study, non-financial measures such as the opportunity to mentor and train younger workers rated above a financial bonus for older workers or an increase in earnings limits for those on an Age Pension. To maximise the number of older Australian workers deferring their retirement, therefore, other policy options, especially incentives to remain in the workforce, will need to be developed and implemented. And such measures need to move beyond the financial realm.

References

AARP (2005) International Retirement Security Survey, Harris Interactive, www.harrisinteractive.com (15th January 2006).

Australian Bureau of Statistics (1998) Retirement and Retirement Intentions Australia 1997, Catalogue No. 6238.0.

Australian Bureau of Statistics (2003) Population Projections Australia 2004-2101, Catalogue No. 3222.0

Australian Bureau of Statistics (2006) Retirement and Retirement Intentions Australia, August 2004 to July 2005, Catalogue No. 6238.0.