Employment of older workers well below the European average

In Luxembourg, in 2018, 40.5% of the people aged between 55 and 64 were still working. In this respect, the Grand Duchy is lagging behind the great majority of other EU countries.

Goal of 50% to be achieved

If pension schemes are to remain viable, one of the priorities since two decades for European countries is to keep older workers in the workforce. For example, the Lisbon Strategy set EU countries an objective of increasing employment rates for older workers to 50% and increasing the average retirement age by five years by 2010.

The position of Luxembourg

In Luxembourg, in 2010 and in 2018, only 4 people aged between 55 and 64 out of 10 were still working. A figure far too low when compared with the EU average (58.7% in 2018). Nevertheless, these figures deserve a closer look as they mask important disparities according to specific groups (age-classes, gender, educational attainment level, etc.). Indeed, by gender for example, in 2010, the employment rate of men aged 55-64 reached 47.7% (close to the European objective), compared to 31.3% for women of the same age. Highlighting these disparities gives an understanding of the issues and challenges of active ageing. It also gives the opportunity to think about either transversal or focused and effective policy responses adapted to the specificities of each group.

In Europe, the consequences on the labour market of an ageing population were and still are at the centre of the concerns of policy makers involved in the European Employment Strategy (EES), EUROPE 2020, and the Lisbon Strategy between 2001 and 2010. Since the beginning of 2000s’, keeping older workers employed has been one of the priorities of European countries to ensure, amongst other things, the viability of pension systems. In that context, two main recommendations (European Councils of Stockholm in 2001 and Barcelona in 2002) has been made to member states:

• increasing the employment rate of older workers and reach 50% in 2010;
• extending the average exit age from the labour market by five years.

With an employment rate of 26% for people aged 55-64 in 2001, Luxembourg was below the European average (37.7% in the EU27) and these targets appeared therefore of a particular interest compared to some other countries, like Sweden (66.7%).

In 2010, the employment rate of seniors aged 55 to 64 raised to 40% in Luxembourg. This employment rate was still lower than the EU average (46%) and below the target recommended at European level. At the same date, nine countries had an employment rate of people aged 55-64 above 50% while Luxembourg ranks 21st within the European countries.

Since 2010, the employment rate of workers aged 55-64 in Luxembourg has stood below or around 40% (40.5% in 2018) and moves down in the overall classification (rank 28) while the EU28 average has reached and even exceeded 50% since 2013 (58.7% in 2018).

Nevertheless, these figures deserve a closer look as they mask important disparities, for instance by age, gender or the educational attainment level.

- For example, by age-groups, the employment rate of workers aged 55-59 increased from 39.3% in 2001 to 55.7% in 2010 reaching therefore the recommended target. In 2018, this rate is about 57.9%*. At the same time, the employment rate of people aged 60-64, has more than doubled but only reached 20.1% in 2010 (8.9% in 2001). In 2018, it was about 19%.

-By gender, in 2010, the employment rate of men aged 55-64 is higher (47.7%) than the one of women (31.3%), albeit below the target. In 2018, while the rate of women increased slightly (35.2%) men's recorded a slight decrease (45.5%).

- By educational attainment level**, very significant differences can be observed. In 2010, employees aged 55-64 who have only reached a level of education below secondary education level had an employment rate of 24.9% (26.8% in 2018). The rate of employees with an upper secondary and post-secondary non-tertiary education level was equal to 34.6% (37.3% in 2018). At the same time, the rate of employees with a tertiary education level was far above the target (66.8% in 2010 and 61% in 2018).

Highlighting these disparities shows that general indicators are not sufficient to capture the whole phenomenon of active aging. Nevertheless, showing these disparities provide a better understanding of the main challenges concerning active ageing. It enables also to deeper reflection on the need for policy responses that could be either transversal policies (in terms of qualifications, for example, as lower qualified people appear to be the most vulnerable on the labour market), or targeted policies focusing on specifics groups of older workers.

* Source: EUROSTAT (click here to refer to the table)

** Source: EUROSTAT (click here to refer to the table)