Older workers and retirement decisions in Belgium: mapping insights from survey data

Article published in the Economic Review of 2023
  • Between 2002 and 2022, a series of policy reforms encouraged people to work longer and increased the employment rate for Belgian workers aged 55-64 from 25% to almost 60%.
  • Older workers are mainly employed in the healthcare, manufacturing and education sectors and often have part-time jobs.
  • Only 9% of new hires in Belgium are over the age of 50.
  • The variables linked to retirement are mainly those of pension eligibility, i.e. age and length of career, but factors such as a lack of managerial support and time pressure (related to deadlines and workload) also affect the motivation of older workers to work longer.

Having regard to population ageing, the sidelining of older workers, thereby reducing the length of their careers, is no longer an economically viable option. Advanced economies have responded to this situation by gradually reforming their social security and pension systems in order to encourage longer working lives.

In Belgium, the Generation Pact adopted in 2005 was a turning point. Following various reforms, the employment rate of workers aged 55 to 64 rose considerably, from 25% in 2002 to almost 60% in 2022. This increase can be seen in the 55-59 age group and, to a lesser extent, in the 60-64 age group.

Who are these older workers? They are mainly employed in health and social work, manufacturing, retail trade and education, and account for a significant proportion of the workforce in agriculture, the financial sector and public administration. They opt for part-time work more frequently than other age groups. However, less than 9% of new hires are aged 50 or above.

What are the main reasons behind (early) exit from the labour market?

According to data from SHARE (the Survey of Health, Ageing and Retirement in Europe), the age at which workers over 50 consider retiring rose by 1.5 years between 2011 and 2019. But there is a fundamental difference between the intention to make an early exit from the world of work and actually retiring.

As far as effective retirement is concerned, eligibility for a pension remains the main driver. Age and length of career are thus practically mechanical predictors of when an individual will retire. With regard to willingness to exit the labour market, which affects a third of workers over 50 taking part in the survey, several factors are particularly influential. Professional circumstances, in particular a lack of managerial support in difficult situations or time pressure associated with deadlines and workload, hold sway over the desire to take early retirement, which is more marked in Belgium than in other European countries.

While delaying access to the state pension has prompted older workers to remain in employment, this article highlights the crucial role played by favourable working conditions in keeping them in work.