A burden or a benefit? The social and economic contributions of elderly Australians

In a world of rapidly expanding technology, it is easy to believe that the labour market favours younger people who have grown up with new technologies. Yet, older adults will also have accumulated a lifetime of personal skills and the wisdom that are hard to replace. There is also substantial evidence that older Australians are still contributing significantly to both the formal and informal economy.

This article explores the value of older Australians by considering their contributions:

• In paid work
• In unpaid work
• As consumers (the ‘silver’ economy)

The elderly contribute their values in paid work:

First, we need only look at income and tax data to see the significant contribution of older Australians. Total net tax contribution of people aged 65 and above is $14.3 billion dollars, approximately equivalent to 7.2% of the whole national tax collection in 2016. And substantial amounts of this tax is paid by people aged over 75.

The AIHW[1] notes that the participation rate for those over 65 has risen from 8% in 2006 to 13% in 2018. The increased rate of employment among older Australians could be explained through a range of causes: a growing portion of the economy is in service industries, which are less physically demanding than many primary industry and manufacturing jobs, enabling older people to work for long; societal shifts that recognise some continued work in older ages as beneficial; government policy changes, including the gradual increase of the age pension access age to 67.

While the tax contribution of this age group is still smaller that the $50b in annual welfare spending on the age pension and other welfare support to older Australians, it still represents a substantial contribution to the government’s fiscal position and broader economy.

Some insights from the sociology of age and ageing

Social gerontologists often distinguish between different meanings of age – for example, chronological, social, and physiological age. Social age refers to socially ascribed age norms, and age-appropriate behaviors. For example, Bernice Neugarten argues that, in all societies, age is one of the bases for the ascription of status and one of the underlying dimensions by which social interaction is regulated: “We all construct norms and expectations, based upon ‘social clocks’, regarding such landmarks as the ‘right’ time to marry, have children, start working, retire, and so on, which are manifested in everyday linguistic expression”. In other words, “All societies rationalise the passage of lifetime, divide lifetime into socially relevant units, and thus transform biological time into social time”.  Many important activities (various forms of care and voluntary work in general) are done by elderly people, not because they are defined by low skill requirements. These activities are seen to be ‘appropriate’ unpaid jobs for which retired people, mainly women, are being assigned.

The sociology of age and ageing can offer some insight into the relationship between individual ageing, the passage of a given cohort through time, and the interconnections between individual ageing, generational change and their relationship to broad changes in the social structure. The early sociology of ageing was derived from functionalist sociology which developed the so-called disengagement theory of ageing. Through roles, norms, and reference groups as vehicles, the theory explains the decline in individual-level competencies or attributes and the subsequent disengagement from social roles and tasks (Talcott Parson 1937). Ageing and the exit from social roles, for example through retirement, was seen to be ‘functional’ for society as one cohort (of young workers) enters the labour market and another cohort (of elderly workers) exits the economy through retirement.

Critics of the functionalist school saw the process in more complex ways and recognised potential conflicts between generations. This conflict model recognised that there can be political and social struggles over retirement and related benefits. In this discussion, I take a view by assuming that as people live longer and enjoy relatively good health into ‘the evening of their lives’ they may benefit psychologically and materially from paid work or voluntary employment. In short, elderly Australians should be offered a variety of options in the labour market and in the voluntary sector. In this discussion, I consider a range of activities that are available to elderly Australians where a fixed retirement has been abandoned and the elderly have more options beyond a fixed age for retirement.

The value of unpaid work

Older Australians are often providers of informal care. This topic was well-explored in the 2015 report Appreciating value: Measuring the economic and social contributions of mature age Australians, which was published by National Seniors Productive Ageing Centre (NSPAC) . It contained some striking statistics – for instance, 80% of mature age Australians receiving assistance received it from informal carers (generally family), and in 2009, 25% of primary carers were aged 65 and over.

The NSPAC report estimates the economic value of informal care for people aged 45 and over. The combined estimate of the value of (unpaid) volunteer work, carer responsibilities and child care total $38.3b in the report. We have applied estimated the proportion of this attributable to people aged over 65 using census statistics and estimate that the corresponding value attributable to that age group is $14.1b.

Even this figure understates some of the other intangible value not usually measured; contribution to other domestic duties, food preparation, language instruction and cultural background mean that the unpaid value to family and community are even larger.

The silver economy

Older Australians contribute to traditional areas of the economy including transportation, communication, entertainment, tourism, cruise/resort relaxation, restaurants, pubs. However, there are also many areas that are specific to older cohorts. Aging bodies produce a market for potential scientific and technological interventions from medical treatments (cardiac implants, kidney dialysis, hip replacements) and therapies (Tamoxifen for breast cancer and prostate cancer screening); or technologies designed to improve lifestyle (stair lifts, cosmetic surgeries, etc) are the so-called cyborg science.

Demand for healthcare has consistently grown faster than the broader economy. While sustainability questions arise, there is no doubt that much of this spending is to support a higher quality of life for Australians as they age. Products that help reduce the impacts of aging are likely to keep growing in importance in the Australian economy.

Conclusion

According to Palmore (1990), “The democratic ideal is that each person should be judged on the basis of individual merit rather than on the basis of group characteristics such as race, sex and age”. With such a significant value to the economy, the Australian elderly should not be considered as just a social/economic burden, purely due to age. In fact, they play an important part in the economy and society in terms of sustainability, development, and prosperity. Bette Davis’s second aphorism – live creatively – applies to these findings.

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