Money pressures drive Estonia’s pensioners to keep working

Estonia has the highest share among OECD countries of pension-age people who continue working primarily to earn money, ERR reported, citing a study presented by the Development Monitoring Centre.

While an average of 35.1 percent of pensioners aged 50 to 69 across OECD countries listed earning money as one of their three main reasons for working, the figure in Estonia was 60.6 percent.

The other main reasons cited in Estonia were enjoying work and wanting to stay active, at 22.9 percent, and maintaining social relationships, at 6.9 percent. The OECD averages for those reasons were 37.3 percent and 8.5 percent, respectively.

According to the Development Monitoring Centre, the OECD data show a clear east-west and north-south divide. In the Baltic states and several Central and Southern European countries, the dominant reason is the need to earn additional income. In Estonia, Lithuania, Slovakia, Greece and Latvia, around half or more of those working alongside their pensions identify this as the main reason.

In Northern and Western Europe, the pattern is reversed. In Norway, the Netherlands, Sweden, Austria and Switzerland, older people more often continue working because they enjoy their jobs and want to remain active.

Estonia and Iceland have the highest employment rates among people aged 65 and over in Europe, the centre said. International comparisons point to an environment that supports older people’s participation in the labour market in Iceland, while in Estonia the high employment rate is primarily linked to relatively low old-age pensions. Estonian pensioners are among those facing the highest poverty risk in Europe. Labour shortages in certain fields, including education, also play a role.

Estonia’s pension system also encourages people to work after reaching pension age, as wages and pensions can be received at the same time. The system therefore does not penalise working during retirement.

A short report by the Development Monitoring Centre on the labour-market participation of older people, referred to as silver workers, found that their employment depends largely on their skills and whether those skills match labour-market needs.

“Estonia’s employment rate among silver workers is already very high by international standards. We should not look only at how many older people work, but above all at what work they do and how well their skills are being used,” centre expert Eneli Kindsiko said in a press release.

“It is crucial to keep the knowledge and skills of silver workers up to date and apply them in critical fields such as education, engineering and healthcare,” she said.

Data presented by the centre showed that Estonia is among the European Union leaders in older people’s participation in the labour market. The employment rate for people aged 65 and over is more than twice the EU average, while among those aged 70 to 74 it is more than three times higher.