Being out of work harms your health – even if it's because you've retired

A new report finds that, after a small boost in health, retirement isn't as refreshing as many think.

A curious thing has been happening with regard to retirement patterns in developed countries: we have been living longer and retiring earlier. Between 1968 and 1999, employment amongst 60-64 year old men fell from 80 per cent to 50 per cent – although it has picked up a little since. In Italy, an incredible 80 per cent of 60-64 year olds are not in employment. This has all happened during a period when life expectation has increased dramatically. In many EU countries, a significant number of people could well spend more time in retirement than working.

Of course, as we get more prosperous we would expect to have more leisure. But there comes a point when financing a longer retirement from a shorter working life becomes unsustainable. Most EU countries, with their state pension schemes designed so that the taxes of the declining working generation pay the pensions of the older generation, have reached the point where huge financial burdens are likely to fall on the next generation of workers. One way to square the circle is to promote more private and funded pension provision. However, one of the few countries that was pursuing this policy – the UK – has now decided to change tack and increase state pensions whilst reducing incentives for private provision.

This leaves working longer as the only safety valve in the system. And many countries have, indeed, been raising state pension ages. However, a concern often expressed by those campaigning against such changes is that it will lead to more ill health. It is argued that people will suffer from stress and will not have the physical capacity to continue their working lives without damaging their health further.

Much of the evidence in this area has been mixed. The indications were that retirement and ill health were correlated but it could be that people who are not well tend to retire early. A new IEA study manages to untangle the evidence. It finds that there can be an immediate “holiday effect” from retirement whereby health improves. However, health then deteriorates after a while. It is found that, over the long term, retirement increases the probability of suffering from depression by 40 per cent and the probability of having at least one diagnosed physical condition by about 60 per cent.

This provides considerable evidence that there can be a “win-win” from the government raising the state pension age much more rapidly. Currently, the government expects to raise the state pension age to 68 by about 2047. By that time, in fact, life expectation at retirement will actually increase – longevity is increasing quicker than the state pension age is being raised. A higher state pension age could lower healthcare costs as well as reduce state pension costs. Secondly, the government should deregulate labour markets – especially for older people. Reducing the risks to employers of hiring older people is likely to widen the range of working opportunities available to them – especially with regard to part-time work. Finally, it is important to ensure that state incapacity benefits are used as a route back into work wherever possible and not used as an early retirement option. The government seems to be making good progress here but, if anything, on the first two policy options it seems to be going backwards.

A notable retiree says goodbye to his old workplace. Photograph: Getty Images

Philip Booth is Editorial and Programme Director at the Institute of Economic Affairs.

 

Photo: Getty
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The rise of the green mayor – Sadiq Khan and the politics of clean energy

At an event at Tate Modern, Sadiq Khan pledged to clean up London's act.

On Thursday night, deep in the bowls of Tate Modern’s turbine hall, London Mayor Sadiq Khan renewed his promise to make the capital a world leader in clean energy and air. Yet his focus was as much on people as power plants – in particular, the need for local authorities to lead where central governments will not.

Khan was there to introduce the screening of a new documentary, From the Ashes, about the demise of the American coal industry. As he noted, Britain continues to battle against the legacy of fossil fuels: “In London today we burn very little coal but we are facing new air pollution challenges brought about for different reasons." 

At a time when the world's leaders are struggling to keep international agreements on climate change afloat, what can mayors do? Khan has pledged to buy only hybrid and zero-emissions buses from next year, and is working towards London becoming a zero carbon city.

Khan has, of course, also gained heroic status for being a bête noire of climate-change-denier-in-chief Donald Trump. On the US president's withdrawal from the Paris Agreement, Khan quipped: “If only he had withdrawn from Twitter.” He had more favourable things to say about the former mayor of New York and climate change activist Michael Bloomberg, who Khan said hailed from “the second greatest city in the world.”

Yet behind his humour was a serious point. Local authorities are having to pick up where both countries' central governments are leaving a void – in improving our air and supporting renewable technology and jobs. Most concerning of all, perhaps, is the way that interest groups representing business are slashing away at the regulations which protect public health, and claiming it as a virtue.

In the UK, documents leaked to Greenpeace’s energy desk show that a government-backed initiative considered proposals for reducing EU rules on fire-safety on the very day of the Grenfell Tower fire. The director of this Red Tape Initiative, Nick Tyrone, told the Guardian that these proposals were rejected. Yet government attempts to water down other EU regulations, such as the energy efficiency directive, still stand.

In America, this blame-game is even more highly charged. Republicans have sworn to replace what they describe as Obama’s “war on coal” with a war on regulation. “I am taking historic steps to lift the restrictions on American energy, to reverse government intrusion, and to cancel job-killing regulations,” Trump announced in March. While he has vowed “to promote clean air and clear water,” he has almost simultaneously signed an order to unravel the Clean Water Rule.

This rhetoric is hurting the very people it claims to protect: miners. From the Ashes shows the many ways that the industry harms wider public health, from water contamination, to air pollution. It also makes a strong case that the American coal industry is in terminal decline, regardless of possibile interventions from government or carbon capture.

Charities like Bloomberg can only do so much to pick up the pieces. The foundation, which helped fund the film, now not only helps support job training programs in coal communities after the Trump administration pulled their funding, but in recent weeks it also promised $15m to UN efforts to tackle climate change – again to help cover Trump's withdrawal from Paris Agreement. “I'm a bit worried about how many cards we're going to have to keep adding to the end of the film”, joked Antha Williams, a Bloomberg representative at the screening, with gallows humour.

Hope also lies with local governments and mayors. The publication of the mayor’s own environment strategy is coming “soon”. Speaking in panel discussion after the film, his deputy mayor for environment and energy, Shirley Rodrigues, described the move to a cleaner future as "an inevitable transition".

Confronting the troubled legacies of our fossil fuel past will not be easy. "We have our own experiences here of our coal mining communities being devastated by the closure of their mines," said Khan. But clean air begins with clean politics; maintaining old ways at the price of health is not one any government must pay. 

'From The Ashes' will premiere on National Geograhpic in the United Kingdom at 9pm on Tuesday, June 27th.

India Bourke is an environment writer and editorial assistant at the New Statesman.

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