Employed and Happy Despite Weak Health? Job Quality and Labour Market Participation of Older Workers in Europe Catherine Pollak Centre d’économie de la Sorbonne (University Paris 1 Panthéon-Sorbonne)

Employment rates of older people in Europe (55-64 year old) JQ and LMP of Older Workers in Europe - Catherine Pollak (Centre d'économie de la Sorbonne) – OECD 2011

Job satisfaction of older workers JQ and LMP of Older Workers in Europe - Catherine Pollak (Centre d'économie de la Sorbonne) – OECD 2011

Older workers with disabilities JQ and LMP of Older Workers in Europe - Catherine Pollak (Centre d'économie de la Sorbonne) – OECD 2011

Research question JQ and LMP of Older Workers in Europe - Catherine Pollak (Centre d'économie de la Sorbonne) – OECD 2011  Why do some countries perform better in terms of labour market participation of older workers despite higher levels of disabilities?  A possible explanation : job quality  Hypothesis: Better job quality enables ageing workers with disabilities to remain employed

What do we know?  Job quality matters to preserve health Impact of work related psychological conditions on functional impairments -jobstrain (demand-control/support) model (Karasek, Theorell, 1990) -effort-reward imbalance (Siegrist, 1996)  Job satisfaction and health matter to stay employed Impact of self reported health and job satisfaction on labour market behaviour of older people: - intended retirement (Blanchet, Debrand, 2007) - early retirement (Debrand, Sirven, 2009)  Job satisfaction rankings: Northern countries > Conti > Med countries - In accordance with international rankings on employment/job quality (objective indicators)  What is less known:  What about ageing workers with disabilities? Do they benefit from better job quality in some countries? Can this explain why they stay longer on the labour market? JQ and LMP of Older Workers in Europe - Catherine Pollak (Centre d'économie de la Sorbonne) – OECD 2011

Method JQ and LMP of Older Workers in Europe - Catherine Pollak (Centre d'économie de la Sorbonne) – OECD Does job quality increase labour market participation at older ages? Selective effects of health and job quality on the labour market: -> Labour market model (Heckman probit) 2. Do disabled people have better access to quality jobs in “good” performing countries? Country differences in proving good working conditions (rewards): -> Compensation model (ordered logit)  Data SHARE (Survey of Health, Ageing and Retirement in Europe) International: Austria, Belgium, Denmark, France, Germany, Greece, Italy, the Netherlands, Spain, Sweden, Switzerland Micro-data: Individuals 50+ Longitudinal: 2004 (wave 1), 2006 (wave 2) Multidisciplinary: Health, Economic, Social

Step 1. Labour market model: estimation process JQ and LMP of Older Workers in Europe - Catherine Pollak (Centre d'économie de la Sorbonne) – OECD 2011 Does job quality increase labour market participation at older ages?  Outcome equation: Sample: year old in wave 1 and employed (for working conditions) (N= 4.688) Dep. Var (y): Outcome in wave 2: y=1 if employed in 2006, 0 else Job quality indicators: job satisfaction, efforts and rewards Controls: distance to legal retirement age, employment status, occupation, type of contract, working time, country  Selection equation: Sample: year old in wave 1 (N= 8.587) Dep. Var (z): Selected in wave 1: z=1 if employed in 2004, 0 else Controls: age, gender, education, household income, family situation, country  Two functions estimated jointly to control for selection effects if (Heckman, 1979)

Labour market model (selection equation results) JQ and LMP of Older Workers in Europe - Catherine Pollak (Centre d'économie de la Sorbonne) – OECD 2011 Selection variables Marg.eff(1)Std err Age ***(0.005) Gender (ref: F) Male 0.226***(0.053) Education (ref: primary) Secondary 0.056*(0.029) Tertiary 0.153***(0.029) Income (ref. Q1) Quartile ***(0.028) Quartile ***(0.032) Quartile ***(0.025) SRH (ref: less than good) Excellent/ very good 0.072***(0.021) Disabilities (ref: no) Not severe ***(0.017) Severe lim ***(0.033) Depression (ref: low risk) High Risk *(0.011) Diseases (ref: <2) >= *(0.017) Spouse status (ref: inactive spouse) Employed 0.052**(0.023) No spouse 0.074***(0.015) Care activities (ref: no care)Provides care ***(0.015)

Labour market model (outcome equation results) JQ and LMP of Older Workers in Europe - Catherine Pollak (Centre d'économie de la Sorbonne) – OECD 2011 Outcome equationEmployed 2006 (Heckman probit, step 2) M1M2M3M4M5 coefStd errcoefStd errcoefStd errcoefStd errcoefStd err Job quality variables Job satisfaction 0.229***(0.074) Job quality score 0.040***(0.015) Reward score 0.047**(0.023) Effort score (0.028) Ratio Effort/Reward *(0.112) Distance E/R 0.075(0.076) Ratio Demand/Control *(0.092) Distance D/C 0.064(0.052) Health variables Reporte d Health Excellent /Very good 0.134***(0.046)0.129***(0.046)0.130***(0.046)0.132***(0.046)0.131***(0.044) Disabiliti es Not severe 0.022(0.050)0.023(0.053)0.020(0.052)0.022(0.052)0.015(0.049) Severe disab *(0.113)-0.216*(0.110)-0.222**(0.111)-0.217*(0.112)-0.225**(0.109)

Step 1. Labour market model : results  Selection (being employed in wave 1): - Healthy worker effect: disabilities (severe or moderate), low self reported health, low mental health, and having chronic diseases decrease the likelihood of being employed  Outcome (staying employed between wave 1 and 2): - Health (SRH and severe limitations) still has an impact on staying employed - Job satisfaction, but also identifiable aspects of good job quality (rewards), increase the likelihood of staying employed  Conclusion: Health and job quality (rewards) have a selective effect on labour market participation of older workers JQ and LMP of Older Workers in Europe - Catherine Pollak (Centre d'économie de la Sorbonne) – OECD 2011

Step 2. Compensation model: estimation process JQ and LMP of Older Workers in Europe - Catherine Pollak (Centre d'économie de la Sorbonne) – OECD 2011 Do disabled people have better access to quality jobs in “good” performing countries?  Assumption (cf. demand-control-support model, effort-reward model) : Monetary and non monetary rewards can compensate for psychological and physical demands (efforts) and the imbalance between these two dimensions increases the risk of job strain and physical illness  Estimation equation Pooled sample: y. old in wave 1 and employed (N=4.610) Disabled sample: y. old in wave 1 and employed, with disabilities (N=1.183) Dep. Var (y=0,…,7): Rewards = salary + skill development + social support + recognition + decision latitude + advancement prospects + job security International comparison: country dummies Controls: Efforts (job physically demanding, constant time pressure), health, and individual and job characteristics (age, gender, education, employment status, occupation, term of contract, tenure, firm size)

Step 2. Compensation model: results JQ and LMP of Older Workers in Europe - Catherine Pollak (Centre d'économie de la Sorbonne) – OECD 2011 Compensation model (Ordered logit) Intensity of rewards 2004 M1 (pooled) M2 (disabled) Ref: Germany Austria ***(0.024)-0.331***(0.047) Sweden **(0.030)-0.338***(0.047) Netherlands 0.289***(0.058)0.141**(0.059) Spain ***(0.057)-0.431***(0.048) Italy ***(0.045)-1.308***(0.066) France ***(0.062)-0.934***(0.060) Denmark 0.086**(0.036)-0.092**(0.040) Greece ***(0.044)-0.569***(0.068) Switzerland 0.493***(0.069)0.253**(0.101) Belgium (0.058)-0.116**(0.053)

Discussion JQ and LMP of Older Workers in Europe - Catherine Pollak (Centre d'économie de la Sorbonne) – OECD 2011  Self-reported health and job satisfaction, but also disabilities and good working conditions (i.e. rewards) are important individual determinants for ageing workers to participate on the labour market  There are substantial differences in terms of job quality between countries: - intensity of rewards is lower in Mediterranean countries (GR, IT, FR, and to a lower extent ES) and Austria - and higher in Northern countries (NL, DE, DK, and SW)  …especially for older workers with disabilities: - Disabled workers are more likely to be compensated by non monetary rewards (such as training, advancement opportunities, and support in difficult situations) in Continental and Northern countries compared to Mediterranean countries  Policy implications: - Better job quality should not only be expected to be the positive outcome of a longer and less intense work life. - Active and Healthy Ageing strategies: Job security and monetary incentives may not be sufficient (further training, flexible work arrangements, health at work)

Step 2. Compensation model: further results Compensation Model : Intensity of rewards (each item of rewards separately) Ordered logit regressions Dep. varFreedomSkillsRecognitionAdvancementSupportSecuritySalary Ref: Germany Austria-0.710*** ***0.210*** **0.075 Sweden ***0.176***0.091*** *** Netherlands-0.481***0.147*0.135*0.582***0.164**-0.801***0.199** Spain-0.843***-0.317***-0.206***0.139*0.145**0.276**-0.584*** Italy-0.913***-0.974***-1.022***-0.259***-0.842*** *** France-0.352***-1.031***-0.784***-0.086*-0.233***0.726***-0.421*** Denmark ***0.197*** ***0.150***-0.241*** Greece-0.889***-0.849*** *** Switzerland0.333*** *** *** Belgium-0.663*** *** * JQ and LMP of Older Workers in Europe - Catherine Pollak (Centre d'économie de la Sorbonne) – OECD 2011 Sample: year old, employed,and declaring disabilities Note: * p<0.10, **p<0.05, ***p<0.01 Dependent variables are coded from 1 (lowest) to 4 (highest)

Job quality variables JQ and LMP of Older Workers in Europe - Catherine Pollak (Centre d'économie de la Sorbonne) – OECD 2011 Questionnaire item Coding = 1 when: Variables “All things considered, I am satisfied with my job”SA/A job satisfaction job quality score = job satisfaction + rewards + (2-effort) “My job is physically demanding” “I am under constant time pressure due to a heavy workload” SA/A effort score [0-2] “I have an opportunity to develop new skills” “I receive adequate support in difficult situations” “I receive the recognition I deserve for my work” “I have very little freedom to decide how I do my work” “My [job promotion prospects/prospects for job advancement] are poor” “My job security is poor” “Considering all my efforts and achievements, my [salary is/earnings are] adequate” SA/A SD/D SA/A reward score [0-7]

Employment rates and disability Full Sample Employed w1 Disabled w1 Disabled and employed w1 Austria % % % Germany % % % Sweden % % % Netherlands % % % Spain % % % Italy % % % France % % % Denmark % % % Greece % % % Switzerland % % % Belgium % % % Total % % % JQ and LMP of Older Workers in Europe - Catherine Pollak (Centre d'économie de la Sorbonne) – OECD 2011

Effort and reward at work by Country JQ and LMP of Older Workers in Europe - Catherine Pollak (Centre d'économie de la Sorbonne) – OECD 2011

Labour market model (selection equation results) JQ and LMP of Older Workers in Europe - Catherine Pollak (Centre d'économie de la Sorbonne) – OECD 2011 Selection variables Marg.eff(1)Std errX CountryRef: Germany Austria ***(0.005)0.060 Sweden 0.262***(0.010)0.112 Netherlands 0.003(0.010)0.106 Spain ***(0.018)0.062 Italy ***(0.017)0.090 France ***(0.009)0.104 Denmark 0.077***(0.006)0.070 Greece ***(0.012)0.112 Switzerland 0.185***(0.013)0.036 Belgium ***(0.010)0.161