A joint study by the University of Mannheim and the University of Barcelona has discovered that late retirement reduces life expectancy. Pre-retirement working conditions are a key factor in life expectancy and delaying retirement by just one year can make a difference.

Mannheim University study reveals retirement-life expectancy link

Delayed retirement reduces life expectancy. Those are the findings of researchers at the two universities in Germany and Spain. Using data from the Spanish social security system and looking at different retirement policies across Europe, researchers found that delaying retirement even by one year can increase the likelihood of dying earlier.

For workers aged between 60 and 69, “delaying labour market exit by one year increases the hazard of dying [...] by 4,2 percentage points”, the study explained.

Among 60 to 69-year-old workers, those most affected by delaying retirement were people between the ages 60 and 64. In some European countries, workers no longer have access to early pension schemes during these years. The study concluded that reduced life expectancy after later retirement is "driven mainly by the immediate effect of losing access to early retirement schemes". 

Researchers also examined how different types of work and their varying physical burdens, psychosocial burdens, required skill level and influence on self-value impacted life expectancy.

The Mannheim-Barcelona study pointed out that, “One of the main policy tools used is to restrict access to early retirement schemes by increasing the minimum pension eligibility age. While there has been extensive literature studying the labour supply responses to such pension reforms, there are relatively few studies about the impact of delaying retirement on mortality.”

German pension system is skating on thin ice

Many countries are currently reckoning with how ageing populations are causing an increasing imbalance in pension systems which rely on younger, working people to fund the pensions of those who are currently retired.

Back in 1981, 2,9 working people in Germany paid into the pension plan of one retiree. Now, according to predictions from the Deutsche Rentenversicherung (German Pension Fund), by 2045, just 1,54 working people will be paying to support one pensioner. 

Unlike in Spain, early retirement is still very popular in Germany. However, to deal with the increasing worker-pensioner imbalance, some employers and government agencies are calling for the retirement age to be raised to 68 or even 70 years old, following in the footsteps of Emmanuel Macron’s recent and much-protested reforms in neighbouring France. 

Raising German retirement age will not quell worker shortage, critics argue

The pension age question is much tangled up with Germany’s record-high-and-growing worker shortage. Critics argue that scrapping early retirement possibilities and increasing the retirement age in Germany still wouldn’t be enough to deal with the worker shortage in the federal republic.

Instead, because of the country's shifting demographics, many have said that encouraging migration is key to filling this gap. Federal Employment Agency director Andrea Nahles recently pointed out, “Even if we leverage all domestic potential [to fill vacant jobs], this will not be possible without further immigration”. 

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