What We Owe Each Other by Minouche Shafik

Author:Minouche Shafik [Shafik, Minouche]
Language: eng
Format: epub
ISBN: 9781473576995
Publisher: Random House

Normal retirement age of men entering the labour market at age 22, with full career

However, this approach has been controversial, and some countries have backtracked because of political opposition. The Slovak Republic has abolished the link with life expectancy and simply raised the retirement age to 64. Italy has suspended the link for some workers until 2026. Spain has also suspended the link to life expectancy, and the Netherlands has temporarily frozen its implementation. Similar reversals have happened in Canada, the Czech Republic and Poland.6

Resistance to raising pension ages usually stems from concerns about fairness. One argument against is that the additional years of life may be unhealthy ones and it is therefore unreasonable to expect people to work when they are not fit. In fact, the evidence seems to show that this is not the case – these years of life tend to be healthy, suggesting that people do have the capacity to work longer. Another argument is that those who are poorer tend to die younger, and those who do more physically demanding jobs may not be able to work longer; therefore, increasing retirement ages for these groups is regressive. While these are valid points, estimates show that those groups who lose out do so by only a small amount.7 Nonetheless, it is possible, if complicated, to take socio-economic differences in life expectancy into account so that greater benefits could be offered to people with higher health risks.8

Fairness is also an important issue in the context of women’s pensions. In many countries women have lower retirement ages than men, even though they tend to live longer. Combined with the fact that they also tend to have shorter careers and receive lower wages than men, this results in lower pensions. In Europe, for example, women’s average pensions are 25 per cent lower than men’s. That is why the elderly poor are disproportionately women. There is a trend towards unifying retirement ages for men and women over the long term; alongside policies that equalise opportunities for women in the world of work, this will help to close the pension gap.9

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