Employment rates among older people have increased over the last decade but are still below those of younger age groups. Furthermore, they have increased largely because cohorts with higher female employment rates have moved into the next age cohort in several countries. This development is likely to come to a standstill (Kantarcı and Van Soest, 2008). People unable to combine full-time employment with care responsibilities, health problems or disabilities may be integrated into the labour market on partial retirement schemes, working on reduced hours with a partial pension or benefit. There is also a group of people who are retired fully but who would be interested in returning to the labour market. Such ‘unretirement’ is not facilitated by many schemes, which are contingent on a reduction of working hours (see the Finnish case study). Even when not dependent on a reduction in hours, partial retirement has a limited potential to integrate or reintegrate people into the labour market, whether from inactivity or unemployment. Other policies are better suited to achieving that goal. Furthermore, because partial retirement schemes tend to focus only on workers, they run the risk of amplifying the gap between those inside and outside the labour market.
There is another (economically active) group for whom the benefit in extending working lives would lie in increasing their working hours rather than decreasing them. In many countries, enabling people to continue longer in work will not be enough to achieve the desired employment rates among older people. In addition, while 45% of workers in the EU aged over 50 would like to work fewer hours regardless of the drop in income, 11% want to work more hours (Eurofound, 2014). In 2015, 21% of part-time workers over 50 said they worked part time because they were unable to find a full-time job, up from 16% in 2006 (Eurostat, 2016).
Micro-, meso- and macro-level impact
As argued above, partial retirement schemes are likely to contribute to extending working lives for some groups (a micro-impact) even when they do not result in longer working lives on average because they reduce working lives for a larger group or to a larger extent (a meso-impact). But partial retirement schemes may still contribute to extended working lives if the macro-context of their implementation is taken into account. More specifically, partial retirement schemes are often part of a package negotiated between social partners. They can, for example, compensate workers to some extent for measures to discourage early retirement or for increases in the statutory pension age. If one takes this macro-perspective and compares the situation before the scheme was in place with that after the scheme was implemented, the impact on length of working lives is likely to be more favourable.
Looking beyond increasing overall hours worked
The discussion so far has assumed that the desired outcome of partial retirement is increased length of working lives and, in particular, the aggregate contribution to hours worked in the economy. This is the focus of the report, and the rationale for this perspective has been discussed in Chapter 1. However, there are other assessment criteria one may consider. This is true for companies, workers and society alike.
For individual older workers, partial retirement can contribute to quality of life, even if it does not lengthen their working lives. It allows them to match their working hours more closely to their preferences. It can also smooth their path to retirement, enabling them to gradually get used to giving up working and to a decreased income (Latulippe and Turner, 2000). At the same time, partial retirees stay connected to the labour market, which makes it easier for them to increase their hours again if they wish. It has been shown that they may wish to do so, often not only for financial reasons but also to continue contributing in an area of their interest, to keep learning and to stay socially integrated (Eurofound, 2012).
For companies, the impact on the aggregate number of working hours may be less significant than the time a worker remains attached to the company. This allows them to retain knowledge for longer, facilitating knowledge transfer. Furthermore, if there is an increase in economic activity and partial retirees are able and willing to increase working hours again, it is easier to draw on these workers than if they had retired fully.
Partial retirement can also benefit broader society even if it does not extend working lives, for example by facilitating older workers to carry out caring activities. This saves public funds and can be good for the quality of life of those being cared for. Partial retirees are also likely to contribute to the quality of society by increased involvement in volunteering (Eurofound, 2014).
Future perspective
This research serves as a basis for the argument that it is important to look to the future rather than to overly rely on past experience. Part-time work has become increasingly common; partial retirement may thus become easier to implement. Second, work after the statutory pension age is increasingly being facilitated by the removal of various barriers. As discussed earlier in this chapter (see the section on ‘Partial retirement after pension age’), this has the potential to amplify the positive impact partial retirement has by enabling or motivating at least some groups to extend their working lives. Most importantly, though, with increased statutory pension ages and reduced options to fully retire early in many countries, measures to extend working lives are likely to be sought more. These can include other elements, but a reduction of hours may be considered as a tool to facilitate longer working lives. More governments, employers and employees are likely to be looking into such options.
Practical experience of partial retirement has shown mixed results. Assessment of schemes is methodologically challenging, but no scheme was identified that unambiguously extended working lives for all participants. On the aggregate level, reduction in hours for all participants has frequently outweighed the increase in hours because of extended working lives for some of them. Partial retirement is likely to extend working lives more often for groups such as people with health problems, disabilities, care responsibilities and physically or mentally demanding jobs than for other groups of workers (see, for example, the Finnish case study; Pagán, 2009).
Policymakers, social partners and pension schemes that are considering establishing or reforming a partial retirement scheme as a tool to extend working lives can learn important lessons from past experiences in terms of challenges for