Life Expectancy and Retirement Age: Policy Options and Practise

The trend to early retirement that has been observed in many industrialized countries (e.g., Kohli et al. 1991) seems to have come to an end. The steady increase in life expectancy has led to changes in retirement age regulations, what in turn accelerates the aging of the workforces. For example, the Czech Republic and Poland increase their retirement age by the amount of the projected increase in life expectancy, what statistically keeps the mean duration of the retirement phase in the life course constant, while the mean working phase in the life course extends. Others countries like Germany rise the retirement age in a way that both the retirement and the working phase increase. Regardless of the amount, these changes affect inequality and redistribution by the social security systems as life expectancy is distributed unequally in these societies: For example, better education and higher income result in higher life expectancy. The paper discusses opportunities to change the current three-parted (and dominantly male-oriented) life course regime in a way that both increased mean productivity of the aging workforces and reduced inequalities can be reached at the same time by reorganizing the life course, namely by redistributing education, work, and retirement phases in the life course. By improving productivity, the problems of ageing societies can be tackled at the societal level (e.g., increasing contributions for social security) as well as both the level of employers (e.g., improved skills of the aging workforce) and employees (e.g., improved health). Discussing such opportunities, other than simply rising retirement age, widens the scope for designing growth friendly social security that help to reduce existing social inequalities.