Populations everywhere are ageing, but especially so in affluent countries. People are living longer and reaching older ages healthier and less frail than at any other time in human history. The combination of unprecedented longevity and the growing size of aged populations makes it obvious that state pension systems have become expensive components of modern welfare states. In most countries, politicians and policymakers are pursuing neoliberal policies to limit state interventions into social welfare in general, and to minimise, where possible, the growth of pension costs in particular. These complex social, economic and political circumstances are all part of the empirical landscape of extended working lives.
The sheer magnitude of demographic change seems, unavoidably, to pose some challenges for traditional public defined contribution pension systems, which are typically the costliest social policy tranche in most affluent countries. Although productivity increases since the mid-20th century created the capacity for nations to first expand, and then sustain, their welfare states, the changing ratio between young and older citizens undeniably puts the issue of the responsiveness of pension systems into public discourse. Alongside the policy influences associated with population ageing, current political preferences for welfare state restructuring (Pierson, 2001; Gilbert, 2002), the re-individualisation of risk (O’Rand, 2011) and neoliberal ideologies (Hacker, 2006) work together to create a seemingly irrefutable logic: people must extend their working lives and delay retirement. From a public policy perspective, the argument is often that individuals must wait longer to retire because their fellow citizens cannot contribute enough revenue to keep public pension promises. From a neoliberal ideological perspective, the state should stop nannying individuals by offering traditional pensions. Instead, individuals should be able to choose pension arrangements that they prefer and be more responsible for financing their own retirements, a process of re-individualising risk (see O’Rand, 2011). From a human capital perspective, and particularly in the context of proportionately smaller working-aged populations, another claim is that older workers have scarce human capital that employers need, and that failing to use older workers would be both irrational and inefficient (Weller, 2007). Furthermore, if the popular culture pundits have it right that ‘70 is the new 50’ (Byham, 2007), individuals themselves may not only want to extend their working lives, but also benefit from it beyond earning wages (see, eg, the vast and growing literature on ‘successful’ ageing and its productive/active variants).