Updated 28 September 2012
Average age people stop working technical description
| Short title | Average age people stop working |
|---|---|
| Technical definition | This indicator measures the ages at which older people withdraw from the labour market and become inactive. This indicator is measured using the "average age of withdrawal from the labour market" statistic which is also published by the Office for National Statistics, specifically using the “static” methodology, which provides more up to date data than their preferred “Duration of Working Life” measure. The average age of withdrawal is based on multiplying each age by the probability of exiting the labour market at that age. Data are not seasonally adjusted so only year on year comparisons are meaningful. |
| Rationale | Extending Working life is one of the main responses to the 2006 Turner report and is an important part of response to demographic ageing and ensuring pensions sustainability. Tracking changes in average age of withdrawal will provide an indication of how government policies to encourage longer working as well as track wider cultural shifts in working later in life. SRP4 – Pensions reform |
| Formula | The method used for calculating the average age of withdrawal from the labour force is referred to as “the static variant” method. It calculates the conditional probability of an age group remaining economically active in the next period. For example, the conditional probability of a person of age 51 remaining active by the time they reach the age 52, is taken to be the activity rate of a 52 year old divided by the activity rate of a 51 year old. The cumulative probability of remaining active is then calculated for all ages between 50 and 76, from which the proportion of all labour market withdrawals is established for each age. These proportions are then weighted by their respective age values and then summed to provide estimates of the average age of withdrawal from the labour force. |
| Start date | Already published annually by the Office for National Statistics in Pensions Trends (Chapter 4) and is a national statistic. Pension Trends, Chapter 4: The labour market and retirement (Office for National Statistics) |
| Good performance | An increase in the average age of withdrawal of more than around 0.5 years would demonstrate an improvement. Confidence intervals are not available due to the nature of indicator. Small changes from one year to another are normal, and the focus should be on longer term trends. We wouldn’t normally expect changes of 0.5 years or more from one year to another – we would expect changes of this magnitude to reflect meaningful change. External factors, such as wider economic conditions should also be taken into account. Data are not seasonally adjusted so only year on year comparisons are meaningful. |
| Behavioural impact | No |
| Comparability | Eurostat publishes comparable statistics across the EU. However, the detailed methodology used is slightly different from that used in the Business Plan indicator, so the exact numbers will differ. |
| Collection frequency | Data will be published quarterly from April 2011 |
| Time lag | Around about six weeks after the end of the quarterly period |
| Data source (which data collection it comes from) | Uses Office for National Statistics Labour Force Survey data (UK) |
| Type of data (Whether it is an official statistic, national statistic, survey, MI ) | Existing data is a National Statistic based on the Office for National Statistics Labour Force Survey data UK |
| Robustness and data limitations | Provides a measure of tracking change in average age of withdrawal over time. The “static” measure we intend to use is the most up to date method, and gives the potential for more regular data. There are issues in relation to the methodology which uses a static age indicator which assumes that factors affecting economic activity of one cohort are the same as those affecting the activity of the next. It may not be able to capture significant policy shifts such as State Pension age changes. In particular the 'static' methodology can overestimate the average exit age of women (by about half a year). We therefore plan to also publish alongside this the Duration of Working life measure – though this is only available on an annual basis and data is two years lagged, for example 2011 Pensions Trends Report reports the 2009 Duration of Working Life figure. Analyses are National Statistics produced to the high professional standards. The quality of National Statistics products is assessed on a regular basis by the independent UK Statistics Authority. Along with other users, DWP are represented on groups that monitor the quality and relevance of the underlying data (Labour Force Survey Steering Group) and the related National Statistics outputs (Labour Market Statistics Theme Group). The analysis is based on a random sample of around 45,000 households each quarter, used for a wide range of National Statistics. |
| Collecting organisation | Office for National Statistics |
| Return format | |
| Geographical coverage | UK |
| How indicator can be broken down | |
| Further guidance |
