Labour Market

The impact of lockdowns on the labour force participation of older workers

The continuing lockdown is going to have a devastating effect on the livelihood of many groups in the population. Attention has focused on younger groups, particularly those with low incomes or in areas, such as retailing, hotels and accommodation and bars and restaurants, which will be slow to recover from the coming downturn.

Understandably, very little attention has focused on older workers – a category to which I admit I belong. People over 70 are statistically at greater risk than the rest of the population from Covid-19, and thinking seems to be that they should continue to remain at home for their own good, and to protect the NHS from being overwhelmed, even after the rest of the workforce emerges from hibernation.

It’s worth noting, however, that by no means all over-70s are simply vulnerable people outside the workforce, the ‘bed-blockers’ and ‘lazy boomers’ which the nastier elements of social media denigrate.

In recent years, more and more of us are continuing to work well past the age at which our parents retired. For some this is an economic necessity, given poor pension provision, limited savings and vanishingly low interest rates. For most, however, it reflects improved health in old age, changes in occupational structure with more emphasis on brainwork rather than physical labour, and a growing preference for continuing to make a contribution to society and the economy rather than devoting themselves to golf, cruise ships and gardening.

The most recent figures show that, in the year to September 2019, over 1.3 million of those 65 and over were still in employment. 520,000 of these were over 70, the age group which the government seems minded to keep in semi-permanent house arrest.

Who are the over-70 workers? 62% of them are men. 98% of them are white – very different from the younger workforce. Unsurprisingly, the overwhelming majority – 88% – are in the private sector. Many are in senior positions in larger organisations. Many run their own businesses.

Some of these – in legal and accounting services, for example, where 18,000 over-70s are still in work – may still be able to work from home in lockdown.

Others, however, may not. One important sector with a disproportionate number of older workers is agriculture, where working outside the home is essential. Last year nearly 20% of all those working in this sector were over 65; an astonishing 11% – over 35,000 people – were over 70. A requirement that all these workers stay at home indefinitely is likely to have a noticeably damaging effect on the agricultural sector at a time when we may be trying to increase domestic production because of trade disruption.

Other perhaps less vital areas where older people nevertheless make a disproportionate contribution include architecture and engineering (think Norman Foster), publishing, fashion, and the creative arts and entertainment. Here over 6% of those treading the boards (Judi Dench) or creating artworks (David Hockney) are in their 70s and well beyond.

All this, of course, is paid work. Retired people are also the backbone of many important voluntary organisations, from helping the National Trust, running charity shops and foodbanks, to keeping non-elite football and cricket clubs going. If all over-70s are confined to home, many useful activities will collapse.

One of the reasons why the contribution of the over-70s is ignored or downplayed lies, once again, with our London-centric political elite. Older politicians are now a vanishing breed amongst the careerists and ex-SPADs at Westminster, many of whom have never worked in the private sector. And the London economy is atypical in respect of older workers, as it is in so many other ways. London has a young workforce, with only 1.2% aged over 70, the lowest for any region of the country and half that in regions such as the East of England and the South West.

It may be that effectively forcing many older workers out of the economy will create openings for some younger people who would otherwise be unemployed. But there is a danger that many small businesses will close and jobs disappear as their owners are sidelined.

In planning the gradual ending of the lockdown, policy-makers need to think carefully about a continuing blanket ban on over-70s leaving the home. Apart from the effect on the individuals concerned, there will be significant economic costs.

And in the longer term, it is unwise to signal to younger people that they should simply retire in their 60s. As the population continues to age, and the burden of state pensions and elder care increases, we need as many over-70s as possible to continue to make an economic contribution.


Editorial and Research Fellow

Len Shackleton is an Editorial and Research Fellow at the IEA and Professor of Economics at the University of Buckingham. He was previously Dean of the Royal Docks Business School at the University of East London and prior to that was Dean of the Westminster Business School. He has also taught at Queen Mary, University of London and worked as an economist in the Civil Service. His research interests are primarily in the economics of labour markets. He has worked with many think tanks, most closely with the Institute of Economic Affairs, where he is an Economics Fellow. He edits the journal Economic Affairs, which is co-published by the IEA and the University of Buckingham.

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