ECONOMIC PARTICIPATION OF OLDER AUSTRALIANS (AGED 65 YEARS AND OVER) WITH AND WITHOUT DISABILITY


INTRODUCTION

Australians are living longer, more active lives. With an increase in ‘active ageing’, and growing flexibility in how we transition from paid work to retirement, many older people are participating in community activities and the workforce for longer.¹ In 2014-15, the average age at which Australians aged 45 years and over intended to retire was 65.1 years, up from 62.3 years in 2004-05, with almost one-quarter (22.6%) not intending to retire until the age of 70 years or older.^2,3

As the last of Australia’s baby boomers approach retirement, a range of factors may influence their decisions about continuing in the workforce. Along with their financial circumstances and work satisfaction, issues such as disability, personal and family health, caring responsibilities, and volunteering may influence their choices. According to the 2015 Survey of Disability, Ageing and Carers (SDAC), there were 3.4 million Australians aged 65 years and over (living in households), of which around one in seven (14.8% or 497,500 people) were participating in the labour force. Around one quarter (27.0%) of older people in the labour force reported that they had disability, compared with over half (51.9%) of those not in the labour force.

Understanding the characteristics of Australia's older workforce and the barriers preventing more participation in the labour force provides important insights into this growing workforce, essential for future workforce planning and the provision of appropriate support to these workers.⁴

Using data from the ABS’s SDAC, monthly Labour Force Survey and Retirement and Retirement Intentions survey, this article investigates the labour force activity of Australians aged 65 years and over, and the impact of older age and disability on their economic participation, including paid employment, informal caring and volunteering. It also examines the characteristics of those mature-age workers (aged 55-64 years) who are approaching retirement.

It is important to distinguish between labour force data collected in the Survey of Disability, Ageing and Carers (SDAC), and monthly Labour Force statistics. The 2015 SDAC collected labour force information at a point in time from a sample of the Australian population aged 15 years and over, and is unique as it provides both employment data and a picture of disability. Data relating to employment from the SDAC is limited to those people living in households only. The ABS monthly Labour Force Survey is Australia's official measure of employment and unemployment, with data collected monthly (over an eight month period) from a rotating sample of the civilian population aged 15 years and over.

DISABILITY STATUS OF ALL* OLDER PEOPLE
*Includes older Australians living in households and in cared accommodation


With many Australians remaining in the workforce for longer, it is important to recognise the potential impact of ill health and disability on retirement decisions. In the SDAC, disability is any limitation, restriction or impairment which restricts everyday activities and has lasted, or is likely to last, for at least six months. A more detailed description of disability is provided in the Glossary.

While disability prevalence rates among older Australians have decreased in recent years, in the 2015 SDAC around half (50.7%) of all people aged 65 years and over reported living with disability. Among those who were still living in their own homes, the proportion of people with disability was lower at 48.2%. The availability and accessibility of appropriate supports are therefore important for ensuring that older people with disability can participate in paid work if they choose to do so.

Disability prevalence also increases with age, with almost two in five people aged 65-69 years (39.7% of men and 36.0% of women) reporting that they had disability in 2015, increasing to over four out of five people aged 90 years and over (81.9% of men and 86.7% of women).





The severity of disability, that is, the extent to which a person has difficulty with or needs assistance with the core activities of mobility, self-care and communication, also increases with age. In the 2015 SDAC, 8.4% of men and 8.6% of women aged 65-69 years reported a profound or severe limitation (that is, they had the most difficulty or needed the most assistance). This rate doubled for people aged 75-79 years (14.9% of men and 16.8% of women).

Over half (51.2 %) of men and two-thirds (68.3%) of women aged 90 years and over had a profound or severe disability. These levels of limitation are described in more detail in the Glossary.


LABOUR FORCE PARTICIPATION OF OLDER PEOPLE


Along with decreasing rates of disability, older Australians are leading more active lives than previous generations.⁵ With a greater capacity to work, and the pressure of an increasing ageing population on the cost of welfare provision, many older people are remaining in paid work beyond the age of 65.⁶

In the 2015 SDAC, of the 497,500 older Australians who were participating in the labour force many (59.8%) worked part-time and over one third (39.4%) worked full-time. There was a small number of older people in the labour force (5,400 people, or 1.1%) who were unemployed.

There were also 20,700 older workers who were underemployed in the 2015 SDAC, that is, employed people who would like to and could work more (for more information on underemployment, see Glossary). The underemployment rate for people aged 65 years and over was 4.2%, which although lower than for people aged 15-64 years (7.9%), it still suggests that there is some underutilisation of the older workforce.

People aged 15 years and over, underemployment rate, by age and disability status(a) - 2015
Age group (years)		15-54				55-64				65+
		With disability	Without disability	Total		With disability	Without disability	Total		With disability	Without disability	Total
Underemployed ('000)		93.0	780.6	872.3		22.1	66.3	88.4		3.7*	16.7	20.7
Total in labour force ('000)		839.0	9527.7	10367.4		306.1	1509.6	1816.7		134.5	364.0	497.5
Underemployment rate (%)		11.1	8.2	8.4		7.2	4.4	4.9		2.8	4.6	4.2
(a) Living in households * Estimate has a relative standard error of 25% to 50% and should be used with caution Source(s): ABS Survey of Disability, Ageing and Carers: Summary of Findings—2015

Older men were twice as likely to participate in the labour force than older women (20.4% and 9.8%, respectively), and were also more likely to be working full-time (47.5% of men, compared to 24.2% of women).



The labour force participation rate, that is, the proportion of the population who were employed or actively looking for work, decreased with age. In 2015, very few men (6.3%) or women (1.8%) were engaged in the labour force beyond 75 years. For more information about labour force participation rate see Labour Force, Australia.



Although labour force participation decreases with age, data from the monthly Labour Force Survey shows that over the previous two decades, a growing proportion of older Australians were working beyond traditional retirement age of 65 years. Labour force participation rates among men aged 65 years and over have almost doubled, from less than 10.0% in 1995 to just under 18.0% in 2015. Among older women, the labour force participation rate has increased from less than 3% in 1995, to just under 10.0% in 2015.



Labour force participation of older people with disability

Older people who were employed had lower rates of disability, suggesting that people without disability may be more likely to work for longer. Around one-quarter (27.0%) of people aged 65 years and over who were in the labour force reported that they had disability in the 2015 SDAC, compared to over half (51.9%) of those not in the labour force. The prevalence of disability among older workers increased with age, from 24.2% of those aged 65-69, to 36.0% of those aged 75 years and over.

People aged 65 years and over, labour force participation by disability status and age(a) - 2015
Age group (years)	65-69	70-74	75+
With disability	24.2	30.4	36.0
Without disability	75.9	70.2	63.8*
Total in the labour force	100.0	100.0	100.0
(a) Living in households * Proportion has a margin of error >10 percentage points which should be considered when using this information Source(s): ABS Survey of Disability, Ageing and Carers: Summary of Findings—2015

Labour force participation in older age was also associated with lower levels of disability severity, with just 2.4% of all older people in the labour force reporting a profound or severe disability, compared to 16.4% of all those not in the labour force. Most (63.7%) older workers with disability had a moderate or mild limitation.

In line with all older Australians, the number of older people with disability who were continuing to work beyond the age of 65 years increased. The 2015 SDAC found that 8.3% of older people with disability were participating in the labour force, increasing from 5.2% in 2003.

People aged 65 years and over, labour force participation rate, disability status(a) - 2003 to 2015
	2003	2009	2012	2015
	Labour force participation rate (%)
With disability	5.2	6.6	7.7	8.3
Without disability	13.7	17.1	20.7	20.9
(a) Living in households. Source(s): ABS Survey of Disability, Ageing and Carers: Summary of Findings—2015

Occupation

For many older people, the decision to remain in employment beyond age 65 may be influenced by the type of work they do. Some physically or mentally demanding jobs may result in earlier retirement, while other occupations may encourage flexibility for those transitioning to retirement.⁴

In the 2015 SDAC, older workers were more likely to be engaged as managers, which may include occupations such as sales or ICT manager, or professionals, such as general practitioners or teachers, than any other occupations. This was particularly so for those with disability, of whom over one-quarter (27.8%) were managers compared with 20.5% of those without disability. A similar proportion of older workers with and without disability were professionals (22.5% and 23.7%, respectively).

LABOUR FORCE PARTICIPATION OF MATURE WORKERS (AGED 55-64 YEARS)


Today’s mature-age workers, people aged 55-64 years, face increasing pressures as they approach retirement. Women in this age group are particularly affected by competing societal demands that encourage increased labour force participation in older age, while simultaneously being relied upon to care for the growing number of older Australians ageing in their own home.⁷ In addition, increasing housing costs mean that more mature-age workers are approaching retirement with a mortgage, while also providing financial or housing support to their adult children.^8,9

Similar to older workers, data from the Labour Force Survey show that labour force participation among mature-age workers is rising. This is particularly so for women aged 55-64 years, whose participation has doubled over the last two decades, from less than 30.0% in 1995 to just under 60.0% in 2015.



According to the 2015 SDAC, of the 2.7 million Australians aged 55-64 years, around two-thirds (67.1%) were participating in the labour force. While many (62.6%) worked full-time, a third (34.0%) of people in this age group worked part-time. In addition there was a small number of 55-64 year olds (63,000 people, or 3.5%) who were unemployed.

Of those in the labour force aged 55-64 years, there were 88,400 people (4.9%) who were underemployed.

Men aged 55-64 years were more likely to participate in the labour force than older women (74.7% compared to 60.0%), and were also more likely to be working full-time (76.9% of men, compared to 45.4% of women).

Labour force participation of mature workers with disability

For mature-age workers intending to retire later, the onset of disability has the potential to alter or limit their plans. According to the 2014-15 ABS Retirement and Retirement Intentions survey, around one in six (16.5%) people who retired between age 55 and 64 years did so due to their own sickness, injury or disability. Ensuring that adequate support is available for those who develop disability to stay in employment is critical to maximising the participation of mature workers.

According to the SDAC, around one in six (16.8%) mature-age people in the labour force reported that they had disability in 2015, compared to almost half (47.6%) of those not in the labour force.

As in older age, labour force participation among those aged 55-64 years was associated with lower levels of disability severity, with just 1.6% of mature-age people in the labour force reporting a profound or severe disability. In contrast, of those aged 55-64 years who were not in the labour force, 16.9% had a profound or severe disability. Most (58.1%) mature-age people in the labour force with disability had a moderate or mild limitation.

Having disability had some effect on whether those aged 55-64 years worked full-time or not, particularly among men. A third (33.8%) of working mature-age men with disability were working part-time, compared to 15.8% of those without disability. Mature-age women were much more likely to work part-time than mature-age men, with over half of those with and without disability working part-time (55.1% and 51.0%, respectively).


INCOME AND WEALTH OF OLDER PEOPLE


Main source of income

With a growing number of Australians working beyond the age of 65 years, there has been an increase in the proportion who reported a wage or salary as their main source of income, from 3.0% in 2003, to 7.2% in 2015. There has also been an increase in the proportion of older Australians reporting superannuation, annuity or private pension as their main source of income, from 10.5% in 2003 to just under one in five people in 2015 (18.2%). In line with these changes, the proportion of older people who reported government pension or allowance as their main source of income decreased, from 74.8% in 2003 to 64.9% in 2015.



Similarly, the proportion of older people with disability who reported a wage or salary as their main source of income increased, from 1.6% in 2003 to 3.7% in 2015, suggesting that there are more older people with disability who were working beyond the age of 65 years. There has also been a corresponding decline in the proportion of older people with disability who reported a government pension or allowance as their main source of income, from 81.2% in 2003 to 74.5% in 2015.



Household Income

As older Australians often rely on government pensions, superannuation or accumulated assets to support their retirement, they are more likely to live in lower income households than people aged under 65 years.^1,10 In recent years however, the proportion of older people who were living in lower income households has decreased.

Equivalised gross household income - Gross household income adjusted using an equivalence scale. For a lone person household it is equal to gross household income. For a household comprising more than one person, it is an indicator of the gross household income that would need to be received by a lone person household to enjoy the same level of economic well-being as the household in question. Equivalised gross household income quintiles - These are groupings of 20% of the total population when ranked in ascending order according to equivalised gross household income. The same dollar values for household income can therefore appear in separate quintiles. For more information, see here.

Of older Australians who reported their income in the 2015 SDAC, the proportion who lived in a household that was in the lowest two equivalised gross household income quintiles (earning less than $1,086 per week) decreased, from 74.6% in 2012 to 67.3% in 2015.

Older Australians in the labour force were less likely to live in a household in the lowest quintile (earning less than $610 per week) than those not in the labour force (10.2%, compared to 33.2%). They were also almost six times more likely to be living in a household in the highest quintile (earning over $2,718 per week) (21.4% and 3.8%, respectively).

Older people with disability in the labour force who reported their income were more likely to live in a household in the lowest quintile, earning less than $610 per week, than those without disability (15.0%, compared to 8.5 %).

Home Ownership

Increasing housing and mortgage pressures, as well as rises in rental stress, may be influencing the retirement decisions of some older Australians.¹¹ Although the majority of older Australians (71.7%) reported owning their own home outright in the 2015 SDAC, this proportion has declined from 75.6% in 2012. Older people with disability were more likely to be renting their home than those without disability (14.8% compared with 10.3%).

Older people who were still participating in the labour force were less likely to own their own home outright than those who were no longer in the labour force (65.1% compared to 73.0%), and were in turn almost three times more likely (20.1%) to have a mortgage than older people who were not in the labour force (7.7%).

According to the 2015 SDAC, disability status had no significant effect on the likelihood of older Australians owning their own home outright (70.6% of those with disability, and 72.8% of those without disability). Of older people with disability, those who were still in the labour force were more than twice as likely to have a mortgage (16.1%) as those who were not in the labour force (6.7%).


OTHER TYPES OF ECONOMIC PARTICIPATION


Carers

Many older Australians spend time caring for a family member or friend. In the SDAC, a carer is defined as a person who provides any informal assistance, in terms of help or supervision, to older people (aged 65 years and over) and those with disability. A primary carer is the person who provides the most informal assistance to a person with disability with one or more of the core activities of mobility, self-care and communication. For more information about carers, see the Glossary.

In 2015, almost one in five (18.4%, or 619,700 people) people aged 65 years or more were carers. Over a third (37.7%) of older carers were a primary carer. Three-quarters (76.0%) of older primary carers were caring for a spouse or partner.⁵

Providing informal care can affect an older person’s capacity to remain in paid work. In 2015, 41.5% of older primary carers spent an average of 40 hours or more per week in their caring role, leaving little time to carry out paid work.⁵ Of older carers who were not in the labour force, one in eight (12.7%) reported that the main reason for leaving work was to commence their caring role.

Primary carers aged 65 years and over(a), not in the labour force and main reason left work was to commence or increase hours of caring role- 2015
	Male	Female	Total
Estimate (000’)	10.0	15.0	27.1
Proportion (%)	11.0	12.3	12.7
(a) Living in households Source(s): ABS Survey of Disability, Ageing and Carers: Summary of Findings—2015

The labour force participation rate of older primary carers was 8.9% in 2015, compared to 15.2% of those who did not have a caring role. While older women were more likely to be primary carers than older men (57.5% compared to 42.6%), they both had similar labour force participation rates (7.8% and 8.1%, respectively).

Caring also affects the labour force participation of those approaching retirement age, particularly women, who make up over half (57.5%) of all carers and nearly two-thirds (65.2%) of primary carers aged 55-64 years. In 2015, less than half (46.4%) of primary carers aged 55-64 years were participating in the labour force, compared to 58.3% of all carers and 69.5% of non-carers in the same age group. In addition, of primary carers aged 55-64 years, women were considerably less likely to participate in the labour force (41.7%) than men (58.1%).

Volunteering

Many older people make a valuable contribution to Australian society by participating in unpaid voluntary activities. Improvements in health in older age has led to the increasing use of the term ‘active ageing’, encouraging older Australians to keep participating in the workforce and community for longer.

In 2015, over one in five (21.2%) older Australians had participated in some form of voluntary activity in the previous three months. Of these older volunteers, around two in five (42.7%) had disability.

People aged 65 years and over(a), participation in voluntary or community services activities in previous 3 months, by disability status- 2015
	With disability	Without disability	Total
Estimate (000’)	304.6	409.9	713.5
Proportion (%)	42.7	57.4	100.0
(a) Living in households Source(s): ABS Survey of Disability, Ageing and Carers: Summary of Findings—2015

Older Australians who were participating in the labour force in 2015 were more likely to report that they were also participating in voluntary activities (25.1%) compared with those not in the labour force (20.6%). Older people who were working part-time were most likely to report that they had volunteered (30.1%).

	Employed, working full-time	Employed, working part-time	Total employed	Total in the labour force(c)	Not in the labour force	Total
Estimate ('000)	31.9	89.6	121.2	124.7	589.1	713.5
Proportion (%)	16.3	30.1	24.6	25.1	20.6	21.2
(a) Living in households. (b) The denominators for these proportions are the total number of people in each labour force category, for example total number of people employed full-time. (c) Includes people who were unemployed. Source(s): ABS Survey of Disability, Ageing and Carers: Summary of Findings—2015

LOOKING AHEAD


Remaining in paid employment offers many benefits beyond financial motivations, including a sense of satisfaction and well-being, improved self-worth, and more active social engagement. As Australia’s ageing population continues to grow, encouraging more older Australians, including those with disability, to stay in or return to the workforce is a key policy issue. Removing barriers to employment, and ensuring that adequate flexibility and support is available to encourage and enable ongoing labour force participation is critical to ensuring that those who choose to remain in the workforce beyond age 65 can do so.


ENDNOTES


1. The Treasury 2015, Intergenerational Report, Australia in 2055, (accessed 4 September 2017)

2. ABS Retirement and Retirement Intentions (cat. no. 6238.0), 2004-05

3. ABS Retirement and Retirement Intentions (cat. no. 6238.0), 2014-15

4. National Seniors Productive Ageing Centre 2011, Ageing and the barriers to labour force participation in Australia, (accessed 23 August, 2017)

5. ABS Survey of Disability, Ageing and Carers Summary of Findings, 2015

6. The Treasury 2010, Intergenerational Report 2010, Australia to 2050: Future Challenges, (accessed 21 August 2017)

7. Page A., Baird M., Heron A., Whellan, J., 2009, Taking care: Mature age workers with elder care responsibilities, (accessed 8 August 2017)

8. Eslake S., Australian Institute of Superannuation Trustees 2017, No place like home: the impact of declining home ownership on retirement, (accessed 14 September 2017)

9. REST 2017, The journey begins, (accessed 14 September 2017)

10. ABS Household Income and Wealth, Australia (cat. no. 6523.0), 2013-14

11. Anglicare Australia 2017, Anglicare Australia Rental Affordability Snapshot, Canberra (accessed 14 September 2017)