Working Conditions, Health and Reward at Work of European Older Workers Thierry Debrand (*), Pascale Lengagne (**) (*) (**) Institute for Research and Information in Health Economics, Paris Workshop on ‘’Working at old age – Emerging theories and empirical perspectives on ageing and work’’ CEDEFOP September, , Thessaloniki

Introduction Problems in Retirement Financing => Employment rate of older workers  Providing financial incentives for firms or individuals These measures have their limits. In particular if older workers are not satisfied with the reward they receive at work, maybe they will always prefer retiring as soon as possible. Looking more precisely at the notion of ‘reward at work’ among older workers Focus on two determinants of reward at work: Working conditions and Health status

Introduction Survey on Health Ageing and Retirement in Europe (SHARE) carried out in 2004&2006  Defining the notion of ’’ Reward at work ’’: ‘’The feeling of receiving the recognition deserved’ ‘’Having adequate salary relatively to the effort realised’’ ‘’Having good prospects for job advancement’’

Introduction Hypotheses, Data, Statistical methods Results Policy implications and conclusions

Hypotheses Hypothesis 1: Existence of wage differentials for risky jobs « Are older workers having risky jobs sufficiently rewarded for these risky conditions? » « Is this hypothesis true within all socioeconomic groups? » Hypothesis 2: Impact of health on reward at work, in the long run Health status, as part of human capital (Becker, 1964; Grossman, 1972; Currie and Madrian, 1999), influences workers’ productivity, income, labour participation… Long run: « poor health status » => lowest socioeconomic position, lowest reward at work Hypothesis 3: Impact of reward at work on health « Effort-reward imbalance » model (Siegrist, 1996) : Imbalance between reward and effort at work is a source of psychosocial risk; on the long run, it can lead to health problems => Self-assessed health status, cardiovascular diseases, depressivity, musculoskeletal disorders. See also: Debrand, Lengagne (2007)

Data

Survey on Health Ageing and Retirement in Europe (SHARE) carried out inSurvey on Health Ageing and Retirement in Europe (SHARE) carried out in 2004 (first wave) and 2006 (second wave) 30,000 people aged 50 and over, living in eleven European countries: Austria, Belgium, Denmark, France, Germany, Greece, Italy, the Netherlands, Spain, Sweden and Switzerland. SHARE is inspired by similar surveys in the United States and in the UK: the Health and Retirement Survey (HRS) in the United States and the British panel ELSA (English Longitudinal Survey on Ageing). The topics considered are of particular interest to several disciplines: health, psychology, economics or sociology. Free access for all researchers! Our sample : workers aged between 50 and 63 in 2004, still working in 2006 Détails on this sample: persons between 50 and 63 in of them was working in = persons who was working in persons who was not working in persons lost

Data Selection effects ? Socioeconomic factors associated with the probability of being surveyed two years later Higher probability No statistical differences according to … Depression risk, Psychosocial risks (Karasek, 1991), No support at work, Country Self-assessed health status, Age, Gender, Education, Firm’s size, Familial structure, Wishes for early retirement, Job insecurity, Reward at work

Indicator of reward at work : (between 3 and 12) Reward = ‘’Receiving the recognition deserving for my work’’ (1 to 4) + ‘’My salary or earning are adequate’’ (1 to 4) + ‘’Having good prospects for job advancement’’ (1 to 4) Low : 34 % in 2004 ; 33 % in 2006 Intermediate : 43 % in 2004 ; 44 % in 2006 High : 23 % in 2004 ; 23 % in 2006 Transitions ? 45 % of low rewarded person in 2004 declare a better reward 2 years later 25 % of intermediate levels declare a low reward 2 years later 21 % of intermediate levels declare a high reward 2 years later 35 % of high levels declare an intermediate reward 2 years later 13 % of high levels declare a low reward 2 years later Indicator of health status : ‘Self-assessed health status’ Indicators of working conditions : ‘Being under constant time pressure due to heavy workload’ ‘Having a physically demanding job’ Data

Statistical Methods

Method (1/2) First step : Correlations between WC and Reward at Work => our first hypothesis M1 : Random-effects regression model => No control for individual time-invariant unobserved differences (for instance: risk aversion, contextual and cultural time-invariant variables… ) M2 : Regression model where regressors are correlated with errors => Control for individual time-invariant unobserved differences

Method (2/2) Second step : Analysis of the causalities between Health and Reward at work (=> our second and third hypothesis) M3 : We have estimated a structural model to study the impact of reward at work on health status. Our IV is the firm’s size.

Results

Correlations (First step) Working Conditions and Reward at Work? When time-invariant differences are not controlled (Model M1) A lack of reward is associated with risky jobs (time pressure or physically demanding job). When time-invariant differences are controlled (Model M2) No association between time pressure and reward => In our sample, ‘compensation for time pressure’ is not rejected. Significant association between physically demanding jobs and reward => ‘compensation for physically demanding job’ is rejected. Standard deviation in parentheses *** = Significant at 1% NS = non significant M1 M2 Odds-Ratio Time pressure due to heavy workload 0.69***1.03ns (0.07) (0.14) Physically demanding job 0.56***0.70** (0.06) (0.12)

Correlations (First step) Working Conditions and Reward at work? Are our last results consistent within all socioeconomic groups? An exploration of several socioeconomic groups leads us to isolate four groups: Group of people who receive compensation for ‘time pressure due to heavy workload’ Firm's size<25, Low educational level, Job insecurity Group of people who do not receive compensation for ‘time pressure due to heavy workload Firm's size>24, High educational level, Job security, Group of people who receive compensation for physically demanding job Low educational level, Self-employed people Group of people who do not receive compensation for physically demanding job High educational level, Employee

When time-invariant differences are not controlled (Model M1) A lack of reward at work is correlated with a poor self-assessed health status. When time-invariant differences are controlled (Model M2) A lack of reward at work is not significatively correlated with a poor self-assessed health status. => If the relationship between health and reward at work ‘’exists’’, it is a ‘’long run’’ relationship. M1 M2 OR Poor self-assessed health status 0.53***1.00ns (0.07) (0.19) Correlation (Second step) Health and Reward at Work?

Analysis of causalities (Second step) Between Health and Reward at Work Estimation of the structural model:

Conclusion

Conclusion (1/2) Reward at Work and Health of European older workersReward at Work and Health of European older workers We have found no effect of self-assessed health status on reward at work => Productivity of people who stay at work does not seem to be influenced by their health status But : Healthy worker biais: if poor health status reduces productivity, workers will be likely to leave their job => these people won’t be rerpresented in our sample. Policy implication: Prevention of health problems would be efficient to keep older workers in their job Reward at work impacts health status « on the long run » Policy implication: Acting on reward at work would improve health status

Conclusion (2/2) Reward at Work and Working ConditionsReward at Work and Working Conditions Our results: “people are rewarded for time pressure”. “ people are not sufficiently rewarded for physically demanding jobs”. And ‘High educational level, at least, are not compensated’ Interpretations? ‘Harmful working conditions in this group are more difficult to recognize’ ‘Employers behaviors: why do they not internalize the impact of working conditions in this group’ Policy implication: understanding why high educational levels are less often compensated for risky jobs => employment rate of older workers in Europe.