As populations age, longer working lives have become central to ensuring the economic sustainability of pension systems and the welfare state. Less often asked, however, is for whom continued employment is realistic — and under what conditions. Our recent chapter in the book Social Sustainability in Ageing Welfare States shows that socially sustainable extension of working lives requires recognizing inequalities and adopting a life-course perspective.
In many European countries, pension reforms have raised the statutory retirement age, restricted early retirement options, and introduced incentives to remain in work longer. These measures have successfully increased the average age of labor market exit over the past decades. However, not everyone is able — or willing — to extend their working life equally.
A key challenge is to ensure that longer careers are realized as fairly and inclusively as possible. This requires acknowledging differences in late-career employment and retirement transitions based on socioeconomic status, gender, health, and job quality. If lengthening working lives increases inequality or undermines intergenerational fairness, it can increase the risk of old age poverty and erode trust in the pension system and the legitimacy of the welfare state.
Social sustainability of longer working lives is a multidimensional issue
Extending working lives is socially sustainable if it does not increase inequality or reduce well-being — now or for future generations. Social sustainability can be assessed on three levels:
- Macro level – Welfare state and pension systems
Longer working lives can ease the financial pressures caused by an ageing population. However, care must be taken not to increase inequality within or between generations. Trust in the pension system and the welfare state is built on a sense of fairness. - Meso level – Labor markets and employers
Employers play a critical role in retaining older workers. While attitudes toward workers over 55 have improved, age discrimination, limited training opportunities, and inflexible work arrangements still exist. The ability to adapt job tasks also varies by sector. Making use of and updating the skills of experienced workers is essential for ensuring a skilled labor force. - Micro level – Individuals and families
Not everyone has equal opportunities to continue working. Health, education, caregiving responsibilities, and job demands all affect whether a longer career is realistic. Voluntary and supported continuation can enhance well-being, while financial necessity may reduce it — especially among vulnerable groups.
Positive trends conceal significant variation
The research literature summarized in our book chapter shows that progress in extending working lives has been largely positive. Europeans are retiring later, and the employment rate of people over 55 has increased significantly since the early 2000s. In many countries, rising life expectancy has offset longer careers, and the balance between working life and retirement has not changed substantially.
Socioeconomic disparities remain significant. Highly educated individuals tend to work longer and receive better pensions, while those with lower education levels and women often have shorter, more fragmented careers — increasing the risk of old-age poverty. Gender differences in late-career employment remain notable.
Health plays a central role. Poor health which often linked to lower socioeconomic status limits the ability to continue working. On the other hand, many find work meaningful — it supports social connections and cognitive functioning. The key question is whether continued work is a choice or a financial necessity.
Towards long and socially sustainable working lives
The research evidence summarized in our chapter offer a foundation for policymaking that promotes longer working lives in a socially sustainable way — through comprehensive, life-course-oriented policies. Pension policy must take into account diverse career paths, caregiving responsibilities, and variations in work ability, as these directly affect both the possibilities to continue in work and the income in retirement.
Active labor market and education policies can support lifelong learning and (re)integration into working life at different stages. Workplaces need to seek for flexible solutions that consider employees’ age and life situations as well as employers’ evolving needs. Preventive health care is key to reducing inequality that accumulates over the life course. Clear communication about demographic challenges and the goals of reforms increases public acceptance, promoting legitimacy of the policy.
Extending working lives is essential for the financial sustainability of pension systems and welfare states, but it must not come at the expense of social sustainability. Policymakers must recognize the diversity of older workers and develop policies that support skills, capacities, and well-being throughout the life course.
Authors
Kati Kuitto and Kun Lee
Chapter
Kuitto, K. & Lee, K. (2025) How to make extending working lives in ageing welfare states socially sustainable, in: Vaalavuo, M. & Nelson, K. & Kuitto, K. (eds.) (2025) Social Sustainability in Ageing Welfare States. Edward Elgar Publishing. 140–165.
About the book
Social Sustainability in Ageing Welfare States (eds. Vaalavuo, Nelson & Kuitto): Social Sustainability in Ageing Welfare States. This is an Open Access title.
