















































AUSTRALIAN POPULATION STUDIES 2020 | Volume 4 | Issue 1 | pages 20-36 
 

 

© McDonald & Moyle 2020. Published under the Creative Commons Attribution-NonCommercial licence 3.0 Australia (CC 
BY-NC 3.0 AU). Journal website: www.australianpopulationstudies.org 

The cessation of rising employment 
rates at older ages in Australia,       
2000-2019 

Peter McDonald*  The University of Melbourne and The Australian National University 
Helen Moyle  The University of Melbourne 

* Corresponding author. Email: mcdonald.p@unimelb.edu.au. Address: Melbourne School of 
Population and Global Health, University of Melbourne, 207 Bouverie St, Vic 3010, Australia. 

Paper received 28 January 2020; accepted 1 May 2020; published 25 May 2020. 

Abstract 

Background 

In the first decade of the 21st century, employment at older ages surged in Australia, benefitting the 
Australian economy. Subsequent to 2010, however, employment rates at older ages ceased rising for 
older men and the increases were much more moderate for women. 

Aim 

The aim of this paper is to examine these older-age employment trends in more detail, particularly 
the association between older-age employment trends and the business cycle. Some attention is also 
given to alternative explanations related to changes in the characteristics of the population and 
industrial structure. 

Data and methods 

Two main data sources are used: published tables from the monthly Australian Bureau of Statistics 
Labour Force Surveys and the Australian censuses for the years 2006, 2011 and 2016. The methods 
used are primarily descriptive. 

Results 

Strong labour demand in the first decade of the 21st century stimulated the entry to employment of 
those out of the labour force, especially at ages 45-54 and especially for men. A cooling of labour 
demand following the global financial crisis terminated this process in the second decade. There 
were strong associations between older age employment and various socio-economic characteristics, 
but, in general, changes in the composition of the population or in the rates of employment by these 
characteristics did not contribute to the cessation of rising employment after 2010. 

Conclusions 

Employment rates at older ages in Australia in the first two decades of the 21st century were the 
results of shifts in labour demand before and after the global financial crisis. Policy related to the 
taxation of superannuation also induced workers with adequate superannuation, especially public 
sector workers, to continue working to at least age 60. 

Key words 

Older age employment, Australia, labour demand, superannuation, gender differences. 
  

 

http://www.australianpopulationstudies.org/
mailto:mcdonald.p@unimelb.edu.au


Australian Population Studies 4 (1) 2020 McDonald & Moyle 21 

 

 

1. Introduction 

The first Intergenerational Report (Department of the Treasury 2002) promoted the benefits of an 
increase in employment at older ages because it would mean that people would be on the tax-paying 
side of the ledger rather than on the tax-disbursal side. Working longer would also mean that the 
people concerned would be able to build up their superannuation entitlements before retiring, again 
reducing the government’s potential future liability. Subsequent official reports made the same 
arguments (Productivity Commission 2005; House of Representatives Standing Committee on Health 
and Ageing 2005). As a result, several policy initiatives were introduced to encourage older age 
employment (Productivity Commission 2005, Swoboda 2014). The 2010 Intergenerational Report 
(Department of the Treasury 2010) raised the additional concern that economic growth would be 
under significant pressure as the baby-boom generation retired from the labour force. This effect is 
clearly demonstrated by economic modelling (Bloom et al. 2011; Temple and McDonald 2017). 

In the first decade of the 21st century, employment at older ages surged in Australia (McDonald 2011) 
and it has been demonstrated that this surge of older age employment benefitted the Australian 
economy as had been predicted (Temple et al. 2017). Subsequent to 2010, however, employment rates 
at older ages ceased rising for men and the increases were much more moderate for women (see 
Section 3). The aim of this paper is to examine older-age employment trends in Australia over the 2000-
2019 period, and in particular the association between older-age employment and the business cycle. 

2. ABS labour force definitions 

The analysis focuses upon ‘employment’ rather than ‘unemployment’ or ‘labour force participation’. 
This is because the distinction between unemployment (not employed but actively looked for work 
at some time in the past four weeks and available for work in the week preceding the survey) and not 
being in the labour force (not employed or unemployed) can be somewhat arbitrary at older ages. 
This is especially the case because ‘looked for work’ does not include scanning job advertisements in 
the newspaper or the internet. Persons in employment are defined as those aged 15 years and over 
who, during the week preceding the data collection, were engaged for at least one hour in any 
activity to produce goods or provide services for pay or profit, or were temporarily absent from work 
so defined (ABS 2018a). 

By these definitions a person very actively engaged in voluntary work (not for pay or profit) is not 
considered to be employed. Criticisms are sometimes made of the low, one-hour criterion to qualify 
as ‘employed’ but this is a very minor issue because, in Australia, less than five percent of employed 
persons are employed for under 10 hours per week (ABS 2019a). 

While these definitions are consistent across Australian Bureau of Statistics data collections, the ABS 
advises that the definitions are not as tightly applied in the Australian censuses as they are in the 
Labour Force Surveys, the two sources used in this paper. However, as shown in the next section, the 
same old-age employment trends are evident from both sources. 

 



22 McDonald & Moyle Australian Population Studies 4 (1) 2020 

 

3. Older-age employment trends, 2000-2019 

Monthly employment rates from January 2000 to November 2019 from the ABS Labour Force Survey 
are shown for men and women aged 55-59, 60-64 and 65+ in Figure 1. Changes in employment rates 
for the age group 65+ may be misleading if the age structure within the age group 65+ shifts to the 
younger or older ends of this range. However, scrutiny of age structure changes in Australia indicates 
that this was not an issue for the period under consideration here. 

For men in all three age groups, the employment rate peaked around the end of 2010 and then 
flattened. For those aged 60-64 and 65+, the levels seem to have risen a little in 2018 and 2019. 
Rates for men aged 55-59, however, appear to have fallen a little since 2010. The very recent 
increases in employment in the two older age groups for men may have been affected by the 
increase in the pension eligibility age from 65 to 67 years between July 2017 and July 2023. For 
women aged 55-59 and 60-64, the rises in employment were even stronger than those for males in 
the first decade and, after levelling off for a few years immediately after the crisis in late 2008 and 
early 2009, women’s rates of employment continued to rise from around 2014 onwards albeit at a 
slower pace than before the crisis. 

 
Figure 1: Percentage employed by sex, age groups 55-59, 60-64 and 65+, Australia, January 2000 to 
November 2019 
Source: ABS 2019a 

Figure 2 shows that the increases in older-age employment in the first decade were very likely to 
have been influenced by earlier rises in employment at younger ages. Employment participation at 
ages 45-49 and 50-54 rose strongly from around 1998 through to the time of the global financial 



Australian Population Studies 4 (1) 2020 McDonald & Moyle 23 

 

 

crisis. Subsequently, participation at these ages fell for both men and women, with rises for women 
only from 2014 onwards. 

 
Figure 2: Percentage employed by sex, age groups 45-49 and 50-54, Australia January 1998 to November 
2019 
Source: ABS 2019a 

 

 
Figure 3: Percentage employed by single years of age, ages 45-79, Australian censuses, 2006, 2011 and 2016 
Source: ABS 2016 



24 McDonald & Moyle Australian Population Studies 4 (1) 2020 

 
Using census data (Figure 3), it is possible to examine trends across time by single years of age. 
Importantly for subsequent analysis, this figure indicates a strong degree of consistency between the 
trends in the Labour Force Surveys and the censuses. In addition, it shows that for both men and 
women, the rate of employment tends to drop monotonically with age from age 50 onwards without 
much acceleration around the pension eligibility ages or any other age. 

A potential argument is that the trends in older-age employment rates may have been the result of 
changes in labour supply at these ages: that supply was constrained in the first decade but increased 
strongly in the second decade. Counter to this argument, however, Table 1 shows that, for age 
groups 55-59 and 60-64, the rates of population growth were much higher in the first decade than in 
the second decade. The reverse was the case for the 65 and over age group. For those aged 55-64, 
employment levelled off in the second decade even though the population of potential workers was 
growing more slowly than in the first decade. 

Table 1: Rates of population growth for older age groups, persons, 2001-10 and 2010-19 

Age Group Annual rate of population growth (%) 
2001-09 2010-19 

55-59 3.0 1.8 
60-64 4.2 1.7 
65+ 2.3 3.4 

Source: ABS 2019a 

In relation to the hours of work for those employed, Table 2 shows that, as expected, women were 
much more likely to work part-time than men in all three older age groups. However, across time, 
there were small increases in the percentage of men working part-time and small decreases in part-
time employment among women, in all age groups. The long-term rise (from the 1990s) in the 
pension eligibility age for women from 60 to 66 may have had a bearing on the rises in employment, 
particularly for women aged 60 and over. 

Table 2: Percentage of employed persons working part-time, males and females, age groups 55-59, 60-64 
and 65+, June 2000 and June 2019 

Sex Age group June 2000 June 2019 
   % 
Males 55-59 11.9 13.2  

60-64 18.6 23.5  
65+ 42.6 48.4 

Females 55-59 49.8 44.0  
60-64 56.2 54.0  
65-+ 70.1 64.6 

Source: ABS 2019a 

The downward trend in both employment and full-time employment for men aged 55-59 is very 
unlikely to have been due to incentives to retire early because these ages are well below the pension 
eligibility age and below the age at which superannuation can be withdrawn tax-free (60 years). 
Thus, this trend suggests involuntary causes. 



Australian Population Studies 4 (1) 2020 McDonald & Moyle 25 

 

 

4. Retention analysis 

From the ABS Labour Force Surveys, it is possible to examine the net probability of retention in 
employment for cohorts as they age from 55-59 years in one survey to 60-64 years in the survey five 
years later. Figure 4 shows these retention rates averaged for the months of June and July. Averaging 
was applied to reduce the effects of sampling variation, but the rates for individual months show 
very similar trends. While this is a ‘net’ probability with new entries balanced off against exits, 
longitudinal analysis from the censuses presented below indicates that entries to employment at 
these ages are uncommon. 

 

Figure 4: Net cohort probability of employment retention, age group 55-59 to age group 60-64, by year aged 
55-59, average of months of June and July 
Source: Derived from ABS 2019a 

The interesting feature of this chart is that the probability of retention for both men and women 
levelled off from as early as the 2002 to 2007 period for men and 2004 to 2009 for women, earlier 
than the point at which the employment rates flattened (around 2010). This means that the 
flattening of employment rates for age group 60-64 was the result of the cessation of increases of 
employment rates in age group 55-59, rather than a drop in the retention rate between 55-59 and 
60-64. 

Similar data are shown by single years of age and for a wider range of ages for the two intercensal 
periods, 2006-11 and 2011-16 in Figure 5. The more refined, single year of age data show some effect 
of the pension eligibility ages, particularly for men. Interestingly, the charts for both men and women 
indicate that retention rates level off from age 65 onwards (retention from 60 to 65 in the chart) at 
about 50-60 per cent, although, at these ages, retention fell somewhat from the first to the second 
intercensal period. For men, the retention rates were lower in the 2011-16 period than in the 2006-
11 period from age 55 upwards. Thus, to a small extent, lower retention across time, especially for 
men, was a contributing factor to the flattening of employment rates. 



26 McDonald & Moyle Australian Population Studies 4 (1) 2020 

 

  

 
Figure 5: Net cohort probability of retention in employment across five-year intercensal periods by age at the 
start of the intercensal interval 
Source: Derived from ABS 2016 

5. Leaving and entering employment at older ages 

The longitudinal census databases enable the tracking of the employment of individuals across 
intercensal periods. Rather than ‘net’ retention as applied in the previous section, the separate 
components of exit and entry can be examined from these data. The percentages leaving 
employment by age were quite similar across the two intercensal periods for both men and women 
but a little higher at older ages for the 2011-16 period compared with the 2006-11 period (Figure 
6A). The life table data (Figure 6B) provide a perspective on the cumulative impact of the different 
rates of entering employment across the two intercensal periods; the impact is almost negligible. 

The rates of entering employment are noticeably higher at the younger ages for the 2006-11 period 
compared with the 2011-16 period (Figure 7A) and these rates convert into higher cumulative rates 
of entry based on the life table data (Figure 7B). Indeed, most of the life table effect of entry to 
employment is achieved by the mid-50s ages. 

The conclusion to be drawn from this analysis of leaving and entering employment is that 
employment rates at older ages increased before 2010 not because of higher employment retention 
but because of high rates of entry among those who were not employed. The rates then flattened 
after 2010 because the rates of entry for those not employed were lower in the later period. Also, 
the higher rates of entry to employment in the first period had their main effect at younger ages (late 
40s and early 50s). These results support the hypothesis that the growth of employment at older 
ages was the result of strong labour demand prior to 2010 which dissipated after 2010. From a policy 
perspective these results imply that, if the aim is to increase older age employment, there should be 
a focus on increasing employment participation below age 55. Higher rates would then persist into 
older ages because of the relative constancy of retention rates. To confirm this hypothesis, individual 



Australian Population Studies 4 (1) 2020 McDonald & Moyle 27 

 

 

level statistical analysis could examine whether people who entered employment during the 
economic boom in middle age continued to be employed into the future. 

 

  

  

 
Figure 6: A. Percentage leaving employment between censuses by single years of age, 2006-11 and     2011-
16; B: The same data in a cumulative life table format 
Source: ABS 2018b 

Notes: A: This is the rate (%) at which employed persons by their age at the first census are not employed five years later at 
the succeeding census. B: From an initial cohort of 100,000 employed persons at exact age 48, B shows the number still 
employed at subsequent exact ages when subjected cumulatively to the rates shown in A. 

  



28 McDonald & Moyle Australian Population Studies 4 (1) 2020 

 

  

  

 
Figure 7: A. Percentage entering employment between censuses by single years of age, 2006-11 and    2011-
16; B: The same data in a cumulative life table format 
Source: ABS 2018b 

Notes: A: This is the rate (%) at which persons not employed by their age at the first census are employed five years later at 
the succeeding census. B: From an initial cohort of 100,000 not employed persons at exact age 48, B shows the number still 
not employed at subsequent exact ages when subjected cumulatively to the rates shown in A. 

6. Reasons not employed 

The ABS monthly Labour Force Surveys include a question on reasons for not being in the labour 
force. In Figure 8, these responses for persons aged 55-64 are combined with those persons reported 
to be employed and unemployed. The result shown in Figure 8 is a distribution from April 2001 to 
November 2019 of all persons into four categories: employed, unemployed (formal) plus others who 
looked for work in any way, those who did not look for work, and those institutionalised or 
permanently unable to work. 



Australian Population Studies 4 (1) 2020 McDonald & Moyle 29 

 

 

 

 

 
Figure 8: Percentage employed and reasons for not being employed, persons aged 55-64, Australia, April 
2001 to November 2019 
Source: ABS 2019b 
  



30 McDonald & Moyle Australian Population Studies 4 (1) 2020 

 
The figures for both men and women show that change from 2001 to 2010 was related to a shift out 
of the category ‘did not look for work’ into the two categories, ‘employed’ and ‘institutionalised and 
permanently unable to work’. From 2010 onwards, there is almost no change, especially for men. 
There was little change in the ‘unemployed or looking for work’ category. 

The strong labour demand from 2001 to 2010 appears to have led many in the ‘did not look for work’ 
category into employment – and this may have occurred at ages earlier than 55. Others from the 
same category in the same period shifted into ‘institutionalised or permanently unable to work’. The 
percentages institutionalised were stable across time, so this was a result of people reporting 
themselves as ‘permanently unable to work’ – presumably persons receiving the Disability Support 
Pension which increased in value substantially during this period compared with the benefit paid to 
those unemployed. Once more, a policy of promoting employment among discouraged job seekers 
aged 45 and over, particularly 45-54, seems appropriate especially if labour demand is strong. 

7. Occupational change 

Having concluded that older-age employment increased in the first decade of the 21st century 
because of higher rates of employment at younger ages (45-54) from about 1998 onwards combined 
with retention of those workers across time, it is useful to consider this in terms of occupations. 
Figure 9 shows two groupings of occupation for men and women that account for around 75 per cent 
of all workers around age 55. The two groups can be classified as higher (Managers and Professionals 
for both men and women) and lower (Technicians, Trades, Machine Operators and Drivers for men; 
Clerical, Administrative and Community and Personal Services Workers for women). 

The first point to make is that leaving employment around the pension age is much more prevalent 
for the lower occupations than for the higher occupations. For men, these are ‘manual’ jobs that may 
become more difficult to perform with increasing age. Interestingly, however, the occupation of 
labourer, the most physically demanding occupation, maintained its percentage of total male and 
female employment with increasing age (not shown). For women, leaving employment is more 
frequent around the pension age for those in the lower, white collar group. Given that men with 
higher level occupations are more likely to be married to women with higher level occupations, joint 
decision making may have a role in these patterns. 

More importantly for the theme of this paper, across time the lower level occupations for both men 
and women make up a larger proportion of employment at the oldest ages (63-73). This strongly 
suggests, as might be expected, that those who entered employment at younger ages from 1998 
(during the boom years) and subsequently retained employment primarily entered the lower level 
occupations. 

8. Other employment differentials 

It has been demonstrated with earlier data that there are some significant differences in 
employment status at older ages by socio-economic characteristics (McDonald 2011). There is a 
potential that employment rates flattened at older ages after 2010 because of changes in the  



Australian Population Studies 4 (1) 2020 McDonald & Moyle 31 

 

 

  

  

 
Figure 9: Percentage of total employment working in selected major occupation groups by age and sex, 2006, 
2011 and 2016 
Source: Derived from ABS 2016 

structure of the older age population by characteristics associated with employment. To consider this 
possibility, this section briefly examines more recent data on the socio-economic determinants of 
employment at older ages. 

Earlier withdrawal from employment is heavily associated with being an employee rather than being 
an employer or self-employed for both men and women (Figure 10). However, the changes across 
time are small and are unlikely to have contributed to the flattening of participation at older ages 
after 2010. 

Public sector employment as a percentage of total employment falls off very sharply at older ages for 
both men and women (Figure 11). Public sector employees normally have good superannuation and 
the time trend data suggest that superannuation policy changes commencing on 1st July 2007 which  



32 McDonald & Moyle Australian Population Studies 4 (1) 2020 

 

  

 
Figure 10: Employees as a percentage of total employment by age and sex, 2006, 2011, and 2016 
Source: Derived from ABS 2016 

  

 
Figure 11: Public sector employees as a percentage of total employment by single years of age and sex, 2006, 
2011 and 2016 
Source: Derived from ABS 2016 

provided major superannuation incentives to continue working to age 60 had a large impact on the 
retention of public sector workers. The chart clearly shows that employment for public sector 
workers fell off from age 55 in 2006 but this shifted to 60 from 2011 onwards. As public sector 
employment is a much higher percentage of total employment for women than for men, this would 
have contributed to better employment participation outcomes for women overall in the post-2010 
period. This analysis suggests that public sector employees stop working in the public sector because 
of a positive retirement income effect. 



Australian Population Studies 4 (1) 2020 McDonald & Moyle 33 

 

 

  
Figure 12: Percentage employed by partner status, sex and age, 2016 
Source: Derived from ABS 2016 

For both older men and women, being partnered has a strong positive association with being 
employed (Figure 12). For those not partnered, employment rates for men and women are the same 
at all ages. While these differences are interesting, the same patterns are observable over time and 
disaggregation by partner status does not contribute to an explanation of the flattening of 
employment rates at ages 55 and over after 2010. However, employment rates for not partnered 
men between ages 45 and 54 were much lower in 2016 than they had been in 2006 and 2011 (not 
shown). In addition, the proportion of men at older ages who are not partnered is increasing over 
time. This will provide a small impetus towards lower employment for men aged 55-59 in the 
immediate future. 

 
Figure 13: Percentage employed by housing tenure, males by age, 2016 
Source: Derived from ABS 2016 



34 McDonald & Moyle Australian Population Studies 4 (1) 2020 

 
Previous research based on 2006 Census data has shown that, at older ages, persons holding a 
mortgage are more likely to be employed than full owners or renters (McDonald 2011). These 
differences were still evident in 2016 (Figure 13). However, within each tenure category, there was 
very little change in employment participation from 2006 to 2016 at older ages and, where there was 
change, it was consistent with the pattern for all men (not shown). However, the proportions of men 
holding a mortgage at older ages is increasing a little across time which could have a small positive 
impact on employment at older ages in the future. 

9. Conclusion 

The central conclusion of the analysis is that, for both men and women, older age employment 
increased in the first decade of the 21st century because expanding labour demand from 1998 drew 
people into employment who were not in the labour force, especially at ages 45-54. Once in 
employment, those recruited in this way appear to have remained in employment. Entry rates rose 
while retention rates remained stable. This pattern was more evident for those who entered lower-
level occupations. This suggests that people out of the labour force who gain employment gather 
self-confidence and work experience that enables them to continue in employment. When labour 
demand cooled after the global financial crisis, entry rates stopped rising and, consequently, 
employment participation at older ages levelled off. 

Specific to those with adequate superannuation, especially public sector workers, the analysis 
suggests that the 2007 policy changes to the taxation of superannuation induced more people to 
continue working until at least age 60. As the coverage of adequate superannuation grows, these 
policies should have a wider effect. 

There are substantial socio-economic differences in employment at older ages. Married men are 
much more likely to be employed than single men; those with a mortgage are much more likely to be 
employed than full home owners or renters; those in good health are much more likely to be 
employed that those who are not (Cai and Kalb 2007; Zucchelli et al. 2010); and employees and 
public sector workers are much more likely to retire earlier than other workers. However, the 
analysis here suggests that these differences along with structural changes in the characteristics of 
the population were insufficient to account for very much of the main employment changes at older 
ages. Accordingly, there is little evidence of any long-term, social trend towards employment at older 
ages. 

Key messages  

• For both men and women, older age employment increased in the first decade of the 21st 
century because expanding labour demand from 1998 drew people into employment who were 
not in the labour force, especially at ages 45-54. 

• Subsequently, retention rates remained stable. This pattern was more evident for those who 
entered lower-level occupations. 

• The 2007 policy changes to the taxation of superannuation seem to have induced more people to 
continue working until at least age 60, especially public sector workers. 



Australian Population Studies 4 (1) 2020 McDonald & Moyle 35 

 

 

• Changing socio-economic characteristics of the population and changes in employment rates 
associated with those characteristics had only minor impacts on aggregate employment trends. 

• There is little evidence of any longer-term social trend to higher employment at older ages. 

Acknowledgements 

The paper was prepared as part of the research endeavour of the ARC Centre of Excellence in 
Population Ageing Research (CEPAR). 

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ABS. https://www.abs.gov.au/websitedbs/D3310114.nsf/home/About+TableBuilder 

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Australian Journal of Labour Economics. 10(4): 227-252. 

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McDonald P (2011) Employment at older ages in Australia: determinants and trends. In: Griffin T and 
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https://www.abs.gov.au/ausstats/abs@.nsf/mf/6102.0.55.001
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36 McDonald & Moyle Australian Population Studies 4 (1) 2020 

 
Temple J and McDonald P (2017) Population ageing and the labour force: 2000-2015 and 2015-2030. 

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	Abstract
	Background
	Aim
	Data and methods
	Two main data sources are used: published tables from the monthly Australian Bureau of Statistics Labour Force Surveys and the Australian censuses for the years 2006, 2011 and 2016. The methods used are primarily descriptive.
	Results
	Strong labour demand in the first decade of the 21st century stimulated the entry to employment of those out of the labour force, especially at ages 45-54 and especially for men. A cooling of labour demand following the global financial crisis termina...
	Conclusions
	Employment rates at older ages in Australia in the first two decades of the 21st century were the results of shifts in labour demand before and after the global financial crisis. Policy related to the taxation of superannuation also induced workers wi...
	Key words
	Older age employment, Australia, labour demand, superannuation, gender differences.
	2. ABS labour force definitions
	Key messages
	Acknowledgements
	References

