Increasing retirement ages in Denmark: Do changes in gender, education, employment status and health matter?

Abstract

Recent studies report significant increases in retirement ages over the past two to three decades in most countries in the Organization for Economic Co-operation and Development—increases that research has attributed mainly to changes in the legislative frameworks for retirement in these countries. Using unique data from the Danish Longitudinal Study of Ageing, this study investigates whether and, if so to what extent, changes to the workforce in terms of gender, education, employment status (employed or self-employed) and health contribute to explaining differences in retirement ages between the cohorts born in 1935 and 1950. The retirement window of these cohorts stretches from the early 1990s to the late 2010s—a period characterized by substantial changes to workforce. On average, retirement ages increased by two years from the 1935 cohort to the 1950 cohort. However, due to changes in the investigated factors having offsetting effects, the net effect of such changes on retirement ages was minor. Thus, while increasing levels of education and better health among older workers contributed to increasing retirement ages, increasing female labour force participation and fewer self-employed workers had the opposite effect. In absolute terms, the total compositional and behavioural influence on retirement ages of changes in terms of employment status (− 0.35 years) was almost as large as the total changes in terms of education (0.44 years). Thus, future studies investigating long-term changes in retirement ages would benefit from including changes in employment status (self-employed or wage earner) as an explanatory factor.

Educational Expansion as a Driver of Longer Working Lives?

“…Some studies have found that education can have a direct effect on retirement ages, even despite the long period of time between entering and exiting the labour market (Hardy 1984;Venti/ Wise 2015). Most studies, however, emphasise that education usually sets the stage for subsequent opportunities in life and work, and that the impact of education on activity at older ages is mediated through, amongst other factors, occupational status, income, wealth, working conditions, and health (Amilon/Larsen 2023;Komp et al 2010;Rohrbacher/Hasselhorn 2022;Thern et al 2022;Turek/Henkens 2023). In particular, educational inequalities in health tend to increase with age (Leopold 2018), making the possibilities for extending working lives more unequal as well.…”

“…Empirical evidence on these trends, however, is thus far mixed. Country-specific factors are likely to play an important role: while in some countries educational inequalities in exit and retirement ages increased, they decreased in other countries (Amilon/ Larsen 2023;Polvinen et al 2022;Riekhoff/Kuitto 2022;Rutledge 2018;Turek et al 2024).…”

Differences in mortality before retirement: The role of living arrangements and marital status in Denmark

“…Today, most of the research and data on differences in labour force participation and age at retirement also focus on SES indicators, such as education. These have shown, for example, that in Denmark the least-educated are less likely to be employed (own analyses of Eurostat data 4 ) and that they retire earlier than more-educated groups, although the difference has been decreasing (Amilon and Larsen 2023). By reducing the importance of the standard retirement age, these patterns could to some extent mitigate the increasing gap in survival between household types as less-educated individuals are also more likely to be single, but to the disadvantage of other dimensions such as earnings.…”