DP47 The Economics of Old Age in Britain: A Long-Run View, 1881-1981

Author(s):	Paul A Johnson
Publication Date:	February 1985
Keyword(s):	Old Age, Retirement, Saving, UK Economic History
JEL(s):	044, 918
Programme Areas:	Human Resources
Link to this Page:	cepr.org/active/publications/discussion_papers/dp.php?dpno=47

The substantial rise in the proportion of elderly (65+) people in the British population over the last hundred years has been matched by a dramatic fall in labour-force participation rates among the elderly. Some commentators see the reduction in work opportunities for the eldery and their increasing reliance on state pensions to avoid poverty as a deliberate construct of successive governments. This paper shows that the economic dependency of the elderly is more clearly a function of long-established employment practices and patterns of asset accumulation. Information drawn from the decennial censuses since 1881 on the occupations of elderly males shows a consistent marginalization of elderly workers in low-wage, low-status occupations. Data on asset-holdings demonstrate that the elderly have a high probability of spending their last years in poverty. This casts doubt on the appropriateness of the life-cycle savings model as a description of the savings behaviour of most workers in 20th century Britain.