February 15, 2019
The UK Government has pursued a policy to extend working lives since 2000. Many other developed nations share this goal and some, notably Germany, have made faster progress towards this goal than the UK. Existing research often explains differences between nations using institutional theories such as Esping-Andersen’s ‘Three Worlds of Welfare Capitalism’ (1990) and Hall and Soskice’s ‘Varieties of Capitalism’ (2001) which categorize Germany as a conservative and the UK as a liberal market economy. Using these theories, Ebbinghaus (2006), predicted Germany faced greater barriers to reversing the policy of early retirement than the UK. However, the employment rate for older people in Germany increased faster than the UK and even overtook the UK in 2011. This thesis presents an explanation for this unexpected outcome.
Four key strategies were identified as underpinning policy changes in Germany and the UK to extend working lives: increasing recruitment, switching to flexible working, changing welfare incentives so work always paid and improving Employability. A review of policy changes indicated Germany no longer fitted the existing conservative/liberal categorization. Such categorizations have been criticized for failing to take account of the differences in life courses of men and women, the increases in female employment and the decline of the male breadwinner household model. So, a fifth explanation was added - that life-course, gender and household changes and the expansion of welfare state services explain the faster improvement in the employment of older Germans. These five explanations were converted to competing hypotheses which were evaluated by cross-national comparison of the employment trajectories of individuals over their life course. Only data which enabled individuals to be tracked over a long period could be used. Key variables from the longitudinal panel surveys from the UK (British Household Panel Survey and its successor Understanding Society) and Germany (Socio-Economic Panel) were harmonised. To compare the effects of policy changes the analysis covered 1992 to 2016. The conclusion was that what had made the difference to German employment of older people was the unintended consequence of improvements in family and social policy in Germany which had improved the employment trajectories of young women. The implication for the UK was to highlight the limits of policies to extend working lives which simply target older people and their employers to change their behaviour. Existing policies are not wrong in themselves but to make further improvements the UK should adopt a more inclusive and coordinated approach.