Various indicators related to labour market exits are presented in further detail in the following pages. These indicators have all been taken from the Swiss Labour Force Survey (SLFS) and adopt a "labour market" approach, i.e. they are based mainly on labour-market status and not on benefits from the old-age provision system.
The indicators are:
Activity rate and employment status of 50-74 year olds
Average age on leaving the labour market
Early retirement rate (labour market approach)
Number of persons aged 65 and older per 100 economically active persons aged 20 to 64
Activity rate and employment status of 50-74 year olds
From the age of 50, the older people become, the more their activity rate (share of economically active persons in the population) declines. Whereas in the period from 2018-2020, 90% of men and 82% of women were still working at the age of 57 (i.e. one year before the minimum age at which a pension can be withdrawn from the 2nd pillar), at the age of 64 the activity rate of men was 56% and that of women at age 63 was 52%. At age 65 36% of men were still economically active and at age 64 28% of women. 74 year-olds also continue to be active on the labour market to some extent (14% of men; 7% of women).
Over the past 20 years, an increase has been seen in the activity rate of 50 to 74 year-old women in particular. The sharp rise in the activity rate of 62 and 63 year-old women is partly due to the ordinary (legal) retirement age of women having been increased twice (in 2001 and 2005).
When expressed in full-time equivalents (FTE), great differences can be observed between the sexes: the figures for women are lower than those of men due to more women than men working part-time. This is especially true up until ordinary (legal) retirement age (approx. 30 percentage point difference).
In addition to the trend in the activity rate by sex, changes in the employment status before and after ordinary (legal) retirement age are also of interest: the share of employees (in the whole population) falls sharply from the age of 60, whereas the decline in the self-employed rate is much less extreme between the ages of 60 and 65. From the age of 65, the trends for both types of employment run almost parallel.
Average age on leaving the labour market
The "average age on leaving the labour market" indicator enables the moment at which people leave the labour force at the end of their working life to be synthesised into one key figure.
The indicator is calculated using the weighted mean age of persons aged 58 to 75 on leaving the labour market*.
Persons whose status changed from economically active to not economically active between two SLFS interviews are considered as having left the labour market.
The receipt of a pension from the three pillars of the old-age provision system is not taken into account to calculate this indicator. Thus, the indicator is based much more on a "labour market approach" than an "old age provision approach".
Labour market exits take place at any age but an increase in exits can be observed after the age of 58. This coincides with the minimum age for receiving a pension from the 2nd pillar. The upper age limit of 75 was chosen because the share of employed persons is very small after the age of 75.
The average age on leaving the labour market was 64.8 in 2022, down from the peak in 2017 (65.8).
The different ordinary (legal) retirement age of men and women is reflected in this indicator: on average, men leave the labour market somewhat later than women (average of the past five years: 0.8 years later). The average age on leaving the labour market also varies depending on employment status, nationality, economic activity and occupation: Self-employed persons, Swiss nationals and persons employed in agriculture and forestry remain economically active longer than average on the labour market. In contrast, persons employed in the economic activities “Banking and insurance” leave the labour market considerably earlier.
For the indicator presented above, one hour of work per week is enough to be considered active on the labour market (international definition according to International Labour Organisation (ILO)). However, a significant share of people in the observed age group first reduce their work-time before giving up employment altogether: if, in addition to stopping employment, a reduction in work-time percentage to less than 20% or less than 50% respectively were also considered as withdrawing from the labour market, the average leaving age would be proportionately lower.
Two alternative measurements are made:
Actual labour market exits plus employed persons who within one year have reduced their work-time percentage of 20% or more to less than 20%.
Actual labour market exits plus employed persons who within one year have reduced their work-time percentage of 50% or more to less than 50%.
International comparison
The OECD publishes an "average effective age of retirement" indicator. This indicator is also calculated using a "labour market approach" and is based on the Labour Force Surveys (these correspond at international level to the SLFS). In other respects, the calculation methods are very different*. Although the OECD indicator has the advantage of being comparable at international level, it is less precise because of the use of 5-years age groups at intervals of 5 years .
The OECD calculation is based on the employment rates of 5-year age groups at 5-year intervals using independent samples (no longitudinal analyses of persons). A decline in the activity rate, for example, between the activity rates of 50 to 54 year olds in 2009 and that of the 55 to 59 year olds in 2014, is considered to be the result of exits from the labour market. This decrease is weighted by the mean age of the age groups (e.g. decrease between ages 50 to 54 and ages 55 to 59 => age 55).
Early retirement rate (labour market approach)
In this indicator, people that fulfil the three following criteria are considered as having taken early retirement:
They have not reached ordinary (legal) retirement age.
They worked at least until the age of 50, but are no longer in employment*.
The main reasons they give for being non-active are retirement, disability or poor health.
People who are employed, even for only one hour per week, are not considered in the analysis as being in early retirement. They are considered to be in employment (in line with International Labour Office recommendations and EUROSTAT standards).
The receipt of benefits from the three pillars of the old-age provision system is not taken into account to calculate this indicator. Furthermore, a person who started work again after have taking early retirement is not considered here to be in early retirement. Thus, a “labour market approach” is adopted and not an “old-age provision approach”. The early retirement rate is calculated by dividing the number of persons in early retirement by the number of people who worked at least until the age of 50.
In the period from 2018-2020, the early retirement rate of people one year before ordinary (legal) retirement age was 39% (at age 64) for men and 30,4% (at age 63) for women. These rates are declining when compared with the period from 2006-2009 (47.1% for men aged 64; 43.2% for women aged 63).
In the period from 2016–2020, one year before ordinary retirement age self-employed persons were almost three times less likely (15.3%) than employees (39.3%) to have retired early. Differences can also be seen between the economic activities, with higher early retirement rates in "Financial and insurance activities", "Transportation and storage" and "Public administration" and lower rates in "Agriculture and forestry" and "Arts, leisure, private households, others".
Related topics
This indicator complements two indicators published in the old-age prevision indicators taken from the "Social security" module of the Swiss Labour Force Survey. Although the denominator is defined in the same way, the numerator is different:
Early retirement rate - self-assessment: the persons considered indicated that they had taken early retirement; this assessment is subjective and does not take into account whether persons receive a benefit/pension or are in employment.
Early retirement rate - receiving a benefit/pension: to be categorised as having taken early retirement, only the receipt of a benefit/pension from at least one of the 3 pillars is considered; this definition does not take the labour market status into account.
Number of persons aged 65 and older per 100 economically active persons aged 20 to 64
The “number of persons aged 65 and over per 100 economically active persons aged 20 to 64” indicator enables an estimate to be made of the level and trend of the burden represented by the older population in relation to the working population.
In 2022, the number of persons aged 65 or more per 100 economically active persons aged 20 to 64 was 37.0. Over the past 10 years, demographic ageing has led to a rapid increase in this ratio (+12%) despite growing labour force participation: in 2012 there were only 33.0 persons aged 65 or older per 100 economically active persons aged 20 to 64. Compared with 1991 (ratio of 28.2 in that year), the change is +30%.
If the number of economically active persons aged 20 to 64 is converted into full-time equivalents, the ratio was 42.8 in 2022.
Switzerland’s population structure has changed considerably over the past few decades. The demographic ageing of Switzerland’s population has an impact on many areas of life. Health topics, employment, retirement and old-age provision are at the heart of the social and political discussion.
The indicators on old age provision provide an overview of the situation of the older population in Switzerland. In addition to looking at the transition to retirement and the financial situation of pensioners, aspects such as living arrangements, health, income and the social integration of this population group are considered.
The new pensions statistics is an exhaustive data collection that describes the number of new recipients of old-age pensions or lump-sum withdrawals from the Swiss old-age provision system. Data are available for all three pillars. In addition to the number of new recipients, the statistic also includes the amount of benefits paid.
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