Good proposal at Vox, but oversimplifies the issue
Posted by Dave Bath on 2009-01-06
I’m a big fan of Vox, which is best described as a group blog by economics professors, and it seems odd that I see a big hole in a paper that has conclusions with which I agree.
"Ageing – saving or working more?" (which has an alternate title, a weird characteristic of all Vox posts, of "How should governments finance the demographic shift?") proposes linkage of retirement age to longevity, something I’ve riffed on before with links to respected economics sites.
However, I cannot see anything in the paper that takes into account the industry in which a person works, and I’d like to see governments have better arrangements for semi-retirement.
As I see it, there are some occupations where retirement age cannot be pushed up safely – laying concrete being an obvious example. There are some which aren’t dangerous as such, but are counterproductive – I don’t want a shaky waitress spilling coffee all over me.
Knowledge workers, however, as they age could become instead "wisdom workers", and using such capabilities can achieve much more than merely save governments money on pensions.
The other considerations are the loss of stamina as we age, and the work-life balance demands as the burden of looking after younger children is shifted from older siblings (as family size decreases) to grandparents (I toddler-wrangle my grandson on average one workday a week).
Unfortunately, human resources recruitment and career path practices, as well as work arrangements defined by government, have very poor schemes for handling the considerations outlined in the previous paragraph: senior part-time/shared positions suitable for experienced but older (or even youngish, capable, but with chronic disease) are not exactly common!
The Vox paper is absolutely correct about the political difficulties associated with developing across-the-board retirement age increases, but adjusting for individual circumstances and the physical demands of different occupations will be even more troublesome.
Nonetheless, governments (and also business associations like chambers of manufacturers) should start looking at pushing up retirement ages, and developing appropriate arrangements (including placement services for older people that may be switching industries) so that individual circumstances and industry-specific needs can be addressed.
The proposal in the Vox paper is great in principle, the arguments are sound, but I am quite disappointed that it greatly oversimplified the issue.
- "Ageing – saving or working more?" by Torben Andersen (2009-01-06, Vox)
- "Work is the new retirement" (2008-05-18)
- "Shrinking and ageing population: What’s the problem?" (2007-07-29)
- "The Baby Boomer Retirement Fallacy and What It Means to You" (2008-05-16, Harvard Business Publishing Conversation Starter)
- The other thing missing is that technical advances in aged care, such as remote monitoring that can remove the need to move people into nursing homes, as well as labor-saving devices, should dramatically decrease the unit cost of managing an ageing population.