The Growing Share of Working Pensioners

Retirement Can Wait: The Share of Working 65-Year-Olds Doubled Over 12 Years

In 2005, 10% of people aged 65 were in the labor force. By 2017, the figure had reached 21%, while the share of income earned from work rose by more than a quarter.

Labor-force participation among people aged 65 and over more than doubled in just over a decade, from 10% in 2005 to 21% in 2017. These figures, supplied by Israel's Central Bureau of Statistics to Calcalist, appear to point to a new source of economic growth. They also lend weight to the idea that a new life stage is emerging between adulthood and old age, much as the extension of schooling in the nineteenth century helped establish adolescence as a separate stage between childhood and adulthood.

Only 10% of people aged 65 were working in 2005. The share rose to 13% in 2011 and reached 21% by 2017. Growth occurred across older age groups. Among those aged 65–69, employment rose from 20% in 2005 to 41% in 2017. Among people aged 70 and over, the share increased from 6% to 11%.

The rise was sharp for both men and women, although a substantial gender gap remained. Labor-force participation among men aged 65 and over rose from 16% in 2005 to 30% in 2017, almost doubling.

It is worth remembering that men in Israel generally reach retirement age at 67, not necessarily by their own choice. At the time of the report, 17% of men aged 70 were still employed.

Women's participation increased more rapidly in percentage terms, although it remained lower than men's. Among women aged 65 and over, the figure rose from 6% in 2005 to 7.5% in 2011 and 14.5% in 2017. That represents an increase of 138% over 12 years.

Particularly striking is that 30% of women aged 65–69 were working, even though women could retire from age 62 at the time. Some may have chosen to remain employed to increase their pensions.

The rise in employment among people traditionally considered to be of retirement age was particularly visible among enterprising and highly educated professionals. For example, the proportion of researchers working after 65 rose from 19% in 2005 to 25% in 2017. Among managers, it increased from 6% to 9%.

One might assume that some older workers were immigrants who had not lived in Israel long enough to accumulate an adequate pension and therefore continued working in security, cleaning or caregiving. The figures do not allow these occupations to be separated easily, but they do show a substantial decline in the proportion of older workers in unskilled jobs, from 9% in 2005 to 5% in 2017.

The implications for older people's income are clear. According to the Joint's annual report on older people, income from work accounted for 21% of average total income among people aged 65 and over in 2010, rising to 27.5% by 2017.

Analysts link increased employment among older people to better health, a growing range of less physically demanding jobs and uncertainty about financing a decent standard of living as life expectancy increases. They argue that, as more highly educated people reach retirement age in the coming decades, working conditions and tax incentives should be adapted to enable them to remain employed.

Avi Spivak, an economics professor at Ben-Gurion University and former deputy governor of the Bank of Israel, says that greater employment among older people increases GDP and creates another source of growth. He commented: “The Treasury should encourage this. I think they're pleased that the effective retirement age is rising. But are they really encouraging it? No.” He added that many people who keep working have above-average abilities, increasing productivity per person.

Yossi Heiman, director general of JDC-Eshel, which works with the government to advance the interests of older people, says: “In our view, 65 isn't old. Old age can be postponed for many years. A new life stage is appearing between 65 and 78–80, neither middle age nor old age.”

Heiman argues that “most people who want to continue working can do so, even if not in the job they had before. They can retrain. I don't think a 67-year-old has to work full-time. Part-time work is an option.” Indeed, 57.5% of employed older people worked part-time. However, the share of 65-year-old workers in full-time employment rose from 36% in 2005 to 42.5% in 2017.

According to Heiman, in 90% of cases older people argue that younger workers are in the wrong positions. He cites hospital department administrators, judges and university lecturers, and suggests transferring experienced hospital managers into mentoring roles: “Make use of their experience.”

What do you think?

This article was based on reporting by Calcalist and translated into Russian by the AVRIKA editorial team. Figures refer to the historical period covered by the original report.