“It is a long term trend that more people are working after 65. The new pensions system is very clear in that it offers a higher pension if you delay becoming a pensioner,” Eskil Wadensjö, a professor in labour market policy at Stockholm University, explained.
The jobs crisis is hitting several groups hard. Men are affected to a greater extent than women and that it reflected in the statistics, even among those over 65.
The number of men over 65 still in work declined to 67,000 in the second quarter from 70,000 in the second quarter 2008.
“The decline in the labour market is affecting the construction and manufacturing industries primarily. It is therefore first and foremost men that are losing their jobs,” Wadensjö says.
The number of women in the same age that remain in work has however increased from 24,000 four years ago to 40,000 today.
An important incentive for those electing to work beyond the statutory pension age of 65 is that taxes are cut as a result of the working tax credit introduced by the current government.
Women have an additional reason to keep working as many have fewer years of employment, due to longer periods of parental leave, according to Wadensjö.
“A key trend is that the pension age will be delayed as there are significant financial incentives to work,” said Lennart Flood, professor in economics at Gothenburg University.
From society’s perspective it is better if a greater number of people continue to work.
“It improves the public finances as it leads to an increase in tax revenue.”
Youth unemployment continues to increase however, but Wadenjsö rejects the assertion that this would decline if a greater number stopped working in favour of drawing their pension.
“No, more likely the opposite. The old and the young do not compete with each for jobs,” he said.