Factors Affecting a Prolonged Working Life for the Older Work Force. the Swedish Case

Sweden is facing the challenge of an aging population and an increasing dependency ratio. The issue of prolonging working life is therefore a top priority. Sweden has made major changes in the pension system to create incentive for participation. During the last decades the participation rate for 55-64 years has increased significantly. Beside the altered pension system and a general trend of a healthier population, also changes inside working life is suggested to explain the increasing participation rate of older. However, the mechanisms that retain the older work force are still unclear.

This paper will study mechanisms behind the older work force’s decision to stay employed. Two hypotheses are discussed. Firstly, the decision to stay is a function of the type of work one have. The explanation for a larger participation rate is therefore a compositional effect implying a larger share of white collars jobs in the occupational structure. The second hypothesis is that it has been a general improvement in the working conditions making it possible for a larger share to continue to work.

Data used are The Panel Survey of Ageing and the Elderly (PSAE). It is a panel that was first launched in 2002 and with a second wave collected in 2010. PSAE is a comprehensive survey that covers besides working life data, also data on incomes and living conditions. Focus is on employed 50-59 years in the first wave 2002 and investigates factors that make them still employed in year 2010. The rationale for the delimitation to 50-59 years old is that the age category is entitled to pensions 2010. In 2002 are 1704 included. However, due to drop outs between the two waves is the effective sample of 878 persons. 59.5 percent are still in employment 2010.