Active Ageing in the European Union

Policy Convergence and Divergence

K. Hamblin

• Publisher: Palgrave Macmillan
• Year: 2013
• ISBN:
  9781137303141
• Topic: Politique et relations internationales
• Subtopic: Politique sociale

This book explores the adoption of 'active ageing' policies by EU15 nations and the impact on older peoples' work and retirement policy options. Policies examined include unemployment benefits, active labour market policies, partial pension receipt, pension principles, early retirement and incentives for deferral.

1

Introduction

Increased longevity and declining fertility are prompting concerns about the sustainability of current welfare arrangements. ‘Active ageing’ policies have been presented as a potential means to arrest the conflict many argue will be produced by the increased share of the older population and the corresponding demands which will be placed on pension and care systems. Though ‘active’ or ‘productive’ ageing are not new concepts, this renewed focus is also argued to be part of a broader shift away from ‘passive’ to ‘active’ social policies. When initially created, activation and active welfare policies focused on young unemployed individuals, but increasingly groups of formerly ‘deserving’ welfare recipients are now the targets of these policies, including for example older individuals,¹ lone parents and those with disabilities.

However, ‘active ageing’ is a contested concept, with organisations such as the World Health Organisation (WHO) focusing on broad elements which enhance the wellbeing of older individuals. This organisation’s active ageing model includes three pillars: health, participation and security. On the other hand, organisations such as the EU and World Bank concentrate more specifically on ‘activity’ in older age in terms of labour market participation for the most part. Indeed, the EU has created two targets for its member states which encourage the re-integration and retention of those aged 55–64 in the labour market.² In focusing on EU15 nations, this book will also concentrate on the EU’s definition of ‘active ageing’, though alternative conceptualisations will also be discussed in Chapter 2.

This book will address the extent to which EU15 nations’ ‘active ageing’ strategies follow the EU’s model and will therefore focus on policies for employment and retirement for older people in three ways.³ First, in order to explore the degree to which they emulate the EU-vision of active ageing, empirical data on national policy pictures will be explored to identify general convergence, the formation of clusters, or distinct national approaches with regard to pensions and unemployment policies for older individuals in EU15 nations from 1995–2010. Second, the character of these reforms over the fifteen-year period will be explored, reflecting the contribution of the new institutionalist literature (which will be addressed in Section 3.2; c.f. Pierson, 2001, 2004) and its focus on national divergence and the importance of policy legacies. Finally the book will address which sub-groups within the category of ‘older age’ are subject to the retrenchment of early exit routes and new policies aimed at retaining and re-integrating individuals into the labour market. As emphasised by the political economy of ageing literature (explored further in Section 3.6), the experience of ageing is not homogenous and social policy plays a role in its construction.

In terms of the book’s structure, the first substantive chapter will address issues around ageing, activity and passivity. For Walker (1996a: 2), at the macro-level, intergenerational solidarity has been formalised by welfare state arrangements in that transfers between generations have ‘encouraged the expectation of reciprocity’. However, as a result of the shift away from decommodifying welfare arrangements (i.e. social policies which provided an alternative to the sale of labour on the market) towards the recommodification of labour (i.e. social policies which promote or insist upon the sale of labour on the market) and the active ageing agenda, the contract between the generations is being recalibrated, with older individuals encouraged to secure their own welfare, either by engaging in paid labour or through purchase on the market (Carmel et al., 2007).

Chapter 3 will narrow the focus to explore the EU’s active ageing agenda, and outlines the approach this volume will take when examining EU15 nations’ policies for older individuals. This chapter also addresses the literature on policy divergence, which acts as a caveat to avoid the overemphasis on policy convergence between EU15 nations. Indeed, the EU has advocated an active ageing agenda that focuses on labour market participation yet the rate, type and target groups within the older age cohort vary in different member states. The policy legacies of EU15 nations provide different environments for active ageing policies and subsequent reforms. Indeed, there was variation in the degree to which the decommodification of this age group was previously encouraged by policy, which meant that some EU15 nations had greater distances to travel in order to implement the EU’s active ageing model. In addition, the older age cohort is not a homogenous group, interacting with social policy in the same way in terms of inputs and outcomes. The political economy of ageing literature emphasises the role social structures, particularly the state, have on the experience of ageing. Though ageing is a biological fact, many of the social facets are constructions and are experienced differently by the various sub-groups that make up a particular cohort. The experience of ageing is filtered through other individual characteristics, such as gender, class and ethnicity, and differential treatment according to these characteristics is carried through the lifecourse (Carr and Sheridan, 2001; Estes, 1991; Heinz, 2001; Phillipson, 2005). Particularly pertinent to this publication is the notion that the experience of ageing is bound to the individual’s labour market history, and therefore disadvantage and discrimination faced by different groups during their working lives are transferred into old age. Thus the shift towards the recommodification of labour is not universally experienced by all ‘older’ individuals, as demonstrated by the data included in subsequent chapters.

In 2004, the EU classified EU15 nations in accordance with the position around the Stockholm target of 50% employment for the 55–64 age group in its Draft Joint Employment Report 2003/2004 (Council of the European Union, 2004: 8). This classification grouped nations into those who had reached the 50% target or were near in 2002 (Sweden, Denmark, the UK and Ireland), those which were ‘particularly worrisome’ as their participation rate for older people was less than 35% (Belgium, Luxembourg, Italy, Austria and France), and an ‘inbetween group’ (Germany, Finland, Spain, the Netherlands and Greece) which was close to the EU average. In Chapters 4 to 7, this volume explores the policies available for older individuals in EU15 nations and revisits this classification to focus on where EU15 nations were in relation to this target by the 2010 deadline. Taking into account the differences in participation rates in 2001 and 2010, the following typology was created which considers both on nations’ overall progress towards the Stockholm target and the distance they had to travel to reach 50% employment for 55–64 year olds:

– Group I – The Vanguards: Nations that were in 2001 above or close to the Stockholm target and have since maintained or strengthened this position, including Sweden, Denmark, the UK, Ireland and Portugal.

– Group II – Surpassing Stockholm: Nations that since 2001 have moved beyond the Stockholm target including the Netherlands, Finland and Germany.

– Group III – Below Stockholm but approaching fast: Nations that have not yet met the Stockholm target, but have made progress beyond the average percentage change for EU15 nations between 2001–2010 (9.6%). These nations include Belgium, Austria and Luxembourg.

– Group IV – The Laggards: Nations that have not yet met the Stockholm target and whose progress was less than the average for EU15 nations (9.6%), including France, Greece, Italy and Spain.

In each chapter, the countries’ interventions for older individuals are examined in terms of their labour market (unemployment benefit extensions and job search exemptions – which represent de facto early exit policies – and active labour market schemes) and pension policies (pension principles, early retirement schemes, incentives for deferring pension receipt). In addition, in order to explore the potential differences in policies available at the micro-level, ‘model biographies’ were used to address the choices ideal-typical older individuals would face in each nation, and how these were altered over time. The model biography approach (influenced by Bradshaw et al. (1993) and Meyer et al. (2007)) allowed for the exploration of the impact individual characteristics such as employment history, age and gender have on individual choice regarding labour market participation and exit. The model biographies utilised were as follows:

– the 50-plus:

– Laurent: Aged 55 with 35 years of employment contributions.

– Jean: Aged 55 with a disjointed employment history.

– the 60-plus:

– Sasha: Aged 63 years with 35 years of employment contributions.

– Jude: Aged 63 with a disjointed employment history.

The data clearly indicate that, as suggested by the political economy of ageing literature, state policies do not interact with all older people in the same way as policy treatment is determined by individual characteristics which then in turn influence the experience of ageing. It became clear when exploring the policy options for the different model biographies that age was an important division between individuals within the older age cohort in terms of their ability to be decommodified and exit, or remain in/re-enter the labour market and be recommodified. Often policies for decommodification did not directly focus on the 50–55 age cohort from the outset, or the policy picture remained static over the ten-year period. It was noted however, that these nations did provide active labour market policies (ALMPs) that were applicable to Laurent and Jean and perhaps in this way, there was not so much a shift from decommodifying welfare arrangements, but an increased onus on recommodification. In addition, it is apparent that gender too was important in that in some nations’ age thresholds were not harmonised, allowing women to exit earlier than their male counterparts. However, in other nations, it becomes clear that though age and gender provide eligibility parameters, access to decommodification was contingent upon other factors such as contribution records or the labour market situation.

Thus the policy approaches of EU15 nations can be divided into those where decommodification was dependent upon desert through contributions (and thus presented Laurent and Sasha with more opportunities for exit due to their 35 years of contributions); those where decommodification was dependent upon the labour market situation (and therefore provided exit according to occupation or economic situation, thereby treating all model biographies the same in certain contexts); and those which largely provided rights-based decommodification options (where the policy packages for Laurent, Jean, Sasha and Jude would have been identical, irrespective of contribution records) (see Table 1.1 below). As with any categorisation, a completely perfect fit not always possible yet the within-group differences are considerably less than those between groups. Indeed as Arts and Gelissen (2002: 140) note “[a]lthough real welfare states are most of the time not unique, they certainly are never completely similar. This means that they are almost always impure types. The consequence is that although they cluster together in three subclasses it is not always easy to classify all cases unambiguously”.

Table 1.1 Typology of decommodification approaches

Decommodification eligibility focus	Early exit/retirement policy characteristics
Rights	Early exit/retirement schemes open to all over a certain age.
Desert	Access to early exit/retirement schemes conditional on previous contribution record.
Labour market	Access to early exit/retirement schemes conditional on employment in a particular industry/particular type of work/with a ‘replacement’ condition.

Chapter 8 provides an analytical discussion of the data from Chapters 4 to 7 with reference to the literature from the first two chapters. Though the data indicate that EU15 nations’ policies for older people from the mid-1990s to 2010 have moved towards ‘active ageing’ insofar as early exit and retirement has been retrenched and activation policies have been introduced, there are two important caveats. First, at the macro-level the picture is more complex than linear convergence with nations moving towards active ageing at different speeds, with different policy mixes and legacies to contend with. Second, at the micro-level, the policy options available to the ‘older’ age cohort are not necessary uniform and thus some groups are encouraged to age more actively than others.

Finally, Chapter 9 concludes that the data demonstrate that though EU15 nations have adopted elements of the EU15’s active ageing approach, there is a great deal of variation in the type and timing of reforms, in part influenced by policy legacies and contexts. Also, there is divergence both between and within nations with regard to their treatment of the older age cohort; not all individuals are equally subject to the active ageing agenda. Thus though the EU discourse may advocate these policies in the hope of preserving intergenerational solidarity, they in turn have an impact on intragenerational equity.

2

Active Ageing: Origins and Resurgence

This book explores the recent pension and unemployment policy developments for older people in EU15 nations with a view to determining whether there has been a shift towards the EU’s ‘active ageing’ agenda in all nations and for all sub-groups within the ‘older age’ cohort. As such it begins by examining the development of the concept of ‘active ageing’ before presenting arguments regarding its resurgence in the 1990s. It therefore discusses the demographic pressures faced by current welfare arrangements and the potential intergenerational conflict that may arise as a result, as well as situating the active ageing agenda within the broader shifts towards either the recommodification of labour or the inclusion of older individuals in the ‘reserve army of labour’. Though this chapter will explore some of the potential explanations for focus on ‘active ageing’, it seeks to provide an introduction to these debates as opposed to a definitive answer or identify a causal relationship; this book instead aims to ...

Table of contents

• Cover
• Title
• Copyright
• Contents
• List of Figures and Tables
• Acknowledgements
• List of Abbreviations
• Chapter 1 Introduction
• Chapter 2 Active Ageing: Origins and Resurgence
• Chapter 3 The EU’s Active Ageing Agenda
• Chapter 4 Group I: The Vanguards – Consolidating Their Position Beyond Stockholm
• Chapter 5 Group II: Surpassing Stockholm
• Chapter 6 Group III: Below Stockholm but Approaching Fast
• Chapter 7 Group IV: The Laggards – Slow Progress Towards Stockholm
• Chapter 8 Policy Convergence, Divergence and Intragenerational Equity in EU15 Nations
• Chapter 9 Conclusion
• Notes
• Bibliography
• Index