8. Austria

Men and women tend to follow different educational and employment paths leading to gender segregated labour markets and to large gender pay and pension gaps. Due to the long tradition of the modified male breadwinner model in Austria, men work continuously full-time while women, especially mothers, tend to exit the labour market for several years after childbirth and re-enter into, more or less family-friendly part-time jobs.

In 2018, the employment rate of men aged 15–64 years (82.3%) exceeded the rate of women (71%). Similarly, only 51.8% of women aged between 55 and 64 have participated on the labour market, while this rate for men was 77.3% in 2018 (Eurostat 2019). The proportion of persons aged over 50 years in total employment (without the marginally employed) increased from 19.7% (2010) to 25.7% (2016) (WKÖ 2017), but it is still low from an international perspective.

The above table summarises the main employment and pension indicators for men and women in Austria (Table 8.1).

The above figures reveal that the pension-related gender gap in Austria is strongly pronounced, in terms of pre-pension employment, exit age and pension level. There is a long-standing debate about women’s high risk of poverty in old age. With the recent change in pension calculation (taking into account the last 40 years instead of only the last years before retirement), unpaid care time (and other absences from the labour market) reduces pension levels (Mayrhuber 2017).

There is little academic debate on the gender effects of extended working life (EWL) policies in Austria. While non-academic studies by state or non-university institutions are mainly descriptive, economists dominate academic studies by applying quantitative modelling to study the determinants of employment participation and retirement age (Schnalzenberger et al. 2014). Austria is often included in international comparisons, but the results shown on aggregate level are not very informative (Mairhuber et al. 2015).

Administrative social security data for the entire Austrian workforce show that old workers ‘(…) face a higher probability of a transition to early retirement, in particular if they are unemployed.’ (Ichino et al. 2016). One of the main reasons for extending working life is to enable or increase pension payments. Monetary incentives for extending working life, however, are more relevant for men than for women (Hanappi et al. 2014). In general, having a strong intrinsic motivation to work, having better (perceived) health and enjoying good working conditions increases the age of retirement (Statistik Austria 2017). Interestingly, both men and women initially plan to work longer than they actually do (Staubli and Zweimüller 2013).

A range of studies conclude that it is the combination of education, gender and class that matters. ‘The lower the social position, the higher the early retirement intentions. Women leave their jobs at a younger age than men. People who spend more time in education retire later.’ (Mairhuber et al. 2015). Independent from gender and age, more highly educated people are more likely to enjoy training on the job and might thus stay longer.

Furthermore, extending working life increases the propensity for workers to become informal caregivers for a frail elderly partner. A range of quantitative analyses show that caregivers in Austria exhibit higher levels of perceived work-family conflict. Gender differences in the perception of experienced physical care burden differ (Schneider et al. 2013; Trukeschitz et al. 2013).

Studies on the labour demand side are scarce. The Austrian seniority principle (where income automatically increases with age) negatively affects the extension of working life (Müllbacher et al. 2014), since older employees become increasingly expensive. An evaluation of a layoff tax for older workers (‘Malus system’) suggests that higher penalty payments would induce companies to keep older workers (Schober et al. 2011). The Austrian Public Employment Service has provided one of the first studies on age discrimination in Austrian companies. The authors found large differences across branches and evidence for negative attitudes towards older workers, who are generally seen as unwilling or unable to adapt to change (AMS 2014).

Austria has been known for its ‘(…) “early retirement” culture in an earnings-related pension system offering a high income replacement rate at an early age.’ (Biffl and Isaac 2007). Against the background of increasing budgetary constraints, due to ageing and increasing pension costs for baby boom generations, there has been a major shift in making efforts towards extending working life since the mid-1980s. These reforms are in line with the corporatist Austrian welfare state paradigm, which tends to guarantee a social standard of a once achieved social position. The average gross replacement rate of the statutory pension scheme (theoretical replacement rate, TRR) is comparatively high at 78.1% (based on the law of 2014) (Blank and Blum 2017).

The Austrian pension system consists of three pillars. Firstly, the statutory pension scheme, which is the dominant pillar. It is not a social provision, but an insurance benefit based on monthly social security contributions and overall working life income. There is a disability pension for those incapable of working and there are survivor benefits for widows/widowers and orphans. The second pillar, a supplementary personal pension scheme (most often the classical voluntary life insurance) plays a minor role. Thirdly, there are (optional) occupational pension schemes (where employers and employees share the contribution cost) depending on collective agreements and varying by sectors (BMASK 2017a, b).

Although there is no minimum pension in Austria, retirees with low earning-related benefits receive a means-tested top-up (Ausgleichszulage) so that their overall benefit in 2020 amounted to €966.65 per month for a single person household and €1,472 for couples (GV 2020; PV 2017b). There are 14 annual payments. Adjustment of the safety-net income is discretionary (OECD 2016). In 2016, approximately 69% of means-tested top-ups were paid to women, a result of the on average low level of female pensions—showing the high importance of women’s reliance on widow pensions (BMASK 2017b). Beside the means-tested top-up for pension, there is a means-tested minimum income scheme (bedarfsorientierte Mindestsicherung) (Table 8.2).

Policies relating to the harmonisation of the different Austrian pension systems have restricted access to early retirement and already show some effects. The average effective retirement age increased to approximately 61 years for women and 63 years for men in 2018 (excluding disability pension) (see Table 8.1, OECD 2019). ‘Invalidity pensions’ and ‘Heavy work pensions’ are now of less importance than previously. Moreover, employees report less health problems (psychological problems) and stay longer in employment (BMASK 2017b). In 2017, the introduction of ‘vocationally oriented medical rehabilitation measures facilitate the return of the partially disabled to the labour market’ (OECD 2019).

The Austrian system now provides financial incentives to work longer by providing higher pensions for delayed retirement (and similarly penalising early retirement). For those retiring between the ages of 65 and 68 the pension is increased by 4.2% per year, however there are no additional increments after 68. Workers defer their labour market exit, continue to pay contributions and thus increase their pension entitlements (OECD 2016). In Austria it is usually possible simultaneously draw a pension and earn money. However, age matters, if pensioners below the age of 65 earn more than a minimum threshold of earnings (€469.66 per month in 2020) the pension is fully withdrawn. After age 65, unlimited earnings from work and pension receipt are permitted (Arbeiterkammer Oberösterreich 2017b; GV 2020; OECD 2016; PV 2017b).

Gross income replacements rates (based on 40–45 years of labour market activity, and retirement between 62 and 65 years) theoretically amount to 60–80% of monthly average life income. However, longer years in education, increasingly disrupted working careers and changes in pension policies (e.g. extending years relevant for the pension amount) have led to reduction and will continue to lead to reductions in the actual pension levels. Given the traditional gender imbalance in care and to increase gender pension equality, years of childcare are considered for pension entitlement (four years per child are credited, with overlaps counting only once) (Horstmann and Hüllsman 2009).

From a macro-perspective, the Austrian Pension Insurance (PV 2017a) confirmed that the pension system after adaptation is now sustainable, with relatively moderate budget increases until 2060. The Organisation for Economic Co-operation and Development argues, however, for an ‘increase in the statutory retirement age, and augmentations in contributions or reductions in benefits.’ (OECD 2019).

According to the Austrian Ministry for Social Affairs the current pension system is evaluated as successful in extending longer working lives (BMASK 2017b). Respective policy measures are as follows (BMWA 2015):

The Survey of Health, Ageing and Retirement in Europe, (SHARE release 1) suggests that older Austrians are generally healthier than their European counterparts, and that the relatively good health conditions are spread quite evenly among the population (Stiglbauer 2006).

Findings on older workers’ health differ substantially between studies. There is evidence that employees with a higher professional status, in a standard employment contract enjoy comparably good health and wellbeing (Arbeiterkammer Oberösterreich 2017a; Eichmann and Saupe 2014: 199; Schober and Winter-Ebmer 2011). The extent of work matters especially for men, a longer working life is strongly connected with better health (Hanappi et al. 2014; Wiedenhofer-Galik 2014). Part-time employment, mainly comprised of female workers, may also increase a person’s perceived wellbeing (Statistik Austria 2009).

Good employment conditions help to keep people healthy and are thus a prerequisite for extending work participation. Effective health-related ‘active ageing’ measures can be realised in the following way (Eichmann and Saupe 2014):

According to labour market experts, these health-related measures are still to be improved in Austria. The observed low labour market participation of workers aged 55–64 is strongly connected to the lack of sufficient efforts in contributing to a healthy life at the workplace. Moreover, the European Agency for Safety and Health at Work (2013) has found a general lack of employee information and knowledge in Austria. Compared with other countries, only a small proportion (11%) of employees know about relevant health programmes for their own workplace (e.g. Eichmann and Saupe 2014).

In recent years, some health-related initiatives have been taken. The above-mentioned ‘fit2work’ is only one of them. Another example is The NESTORGOLD (BMASK 2018) developed in 2010 by the Ministry of Social Affairs, the Ministry of Science, social partners and the Public Employment Service. Companies receive a three year seal of quality, when they sign the NESTORGOLD Charter, provide a company workshop and realise specific measures on age- and ageing-appropriateness (e.g. adult education, health promotion and employee-friendly hours of work). Another example is the initiative Work and Ageing (Arbeit and Alter) by the Austrian social partners, a platform to promote healthy ageing in work (IV et al. 2018). Health is one of the pillars including continuous learning, work, workplace and age-effective leadership. It should, however, be noted that gender is often not acknowledged as a relevant category.

In Austria, there is little media debate about gender and health effects of pension reforms or EWL policies. Media headlines predict an ageing-related increase of the already high pension costs, which could endanger the sustainability of the welfare state. A problem is foreseen in the retiring baby boom generation. The debate addresses various options about how to implement effective counter-measures. One is to link retirement age and contribution payments more strongly to the growing life expectancy by increasing social security contributions. However, labour costs in Austria are already among the highest in Europe, making this a disputed and potentially ineffective solution.

Firstly, the right-populist government (Österreichische Volkspartei [ÖVP] and Freiheitliche Partei Österreichs [FPÖ] between 2017 to mid-2019) has implemented far reaching labour market reforms, stating that the recent economic recovery does not justify any public intervention for older workers. Consequently, special measures and subsidies to integrate unemployed older workers into the labour market have been abandoned (e.g. Aktion 20.000).

Secondly, in 2018 a highly controversial work time law has recently extended daily working hours from 10 to 12 h/day, and 60 hours per week. Previously only some collective agreements included such options; this is now possible in any sector. While in principle, the employee could refuse, social partners representing employees’ interests criticise the new work time law as it increases the power of employers. Future evaluations should address to what extent paid working hours have increased and affected women’s and men’s health.

Finally, non-governmental organisations and labour representatives draw attention to the precarious situation of vulnerable groups, such as single mothers, people with a migration background, families with many children, and the old-age pension of women as well as widows. It is emphasised that a substantial proportion of women, especially those combining paid work with unpaid work and care, suffer from low income and low pensions, mainly due to disruptive career breaks and a lack of care facilities. In this context, critics point out that the social partners in Austria are particularly interested in representing full-time employees in secure positions, while the weakest groups on the labour market, especially part-time working women, need stronger support (Eichmann and Saupe 2014).

The Austrian debate therefore revolves around higher exit ages and thus extended working life to keep the (pay-as-you-go) pension scheme sustainable and statutory schemes—still the main pension pillar in Austria—at stable and inclusive values (BMASK 2016). While raising pension ages is generally seen to be in line with the requirements of a longer life span, the employee representatives (AK-Chamber of Labour, ÖGB-Austrian Trade Unions) criticise prevailing gender inequalities over the entire lifecourse (e.g. segregated labour markets and gender pay gaps) (Mairhuber 2016). Women, especially carers with disruptive careers suffer from old-age poverty. The Austrian Economic Chambers (WKÖ 2018) are by contrast mainly concerned with the competitiveness of the economy, skills gaps and labour availability. Future studies will show to what extent recent changes, especially in prolonging the daily working time to 12 h, does affect the (health) situation of men and women on the labour market and the respective age of retirement as well as retirement preferences. Working conditions are crucial to the maintenance of health among older workers (Steiber and Kohli 2017).

The foremost aim of the Austrian pension reforms is to keep welfare state expenditure at sustainable levels. Measures to narrow the gap between the numbers of employed and pensioners show some success, but strong gender differences prevail. The decrease in pension benefits by extending the calculation span to a person’s entire lifetime earnings will affect all, but more strongly women, who tend to interrupt their working career for care or often work in part-time jobs.

Care was and is the responsibility of Austrian women, unpaid and with low recognition in the public sphere. As a consequence, gender differences in all life domains are large and persistent. Health and wellbeing, however, vary by the intersection of age, gender, migration background and social class position. Evidence suggests that a higher professional status and/or good working conditions are strongly linked with healthy and extended working lives, for men and women.

More in-depth academic research on the gender and health effects of EWL policies is still needed. The main obstacles in applying quantitative methods are the lack of longitudinal data (especially panels) and problems in matching register and survey data. Innovative research designs (qualitative and mixed methods) could complement the prevailing focus on economic issues (costs and benefits). More research is also needed on the variation in retirement behaviour by different sectors and regions, the importance of working conditions and the quality of work upon health and wellbeing of persons with diverse characteristics. It would be worthwhile to address the gap in studies on ageism, age discrimination and diversity management in Austria.

In Austria, caring for children, older or disabled persons contributes to pension entitlement, which is mainly relevant for women. However, this financial acknowledgement does not fully compensate for unpaid work and results in large gender pension gaps. In addition, extending the calculation of pensions to the entire working life should be gender and social class-proofed.

Policy measures need to address the challenge that women’s risk of working in a low-income job in Austria is among the highest in Europe. There is a long tradition of gender segregation not only in the educational system but also in the labour market, resulting in large gender employment and gender pay gaps. Although in recent decades we have witnessed an increase in care facilities for children of different age groups, this increase does not meet current demand (also in full-time school systems and afternoon leisure centres). Most notably, affordable and attractive institutional care facilities for older or frail people are limited.

Although the Austrian ministries regularly praise employers for being a role model in ‘family friendliness’ or ‘diversity management’, there is further need for large public campaigns addressing gender differences and health problems. Research has shown that older workers have a low propensity to find a job when unemployed. Furthermore, many employees would like to extend working life, but are often unaware of existing measures of ‘active ageing’. Employers as key stakeholders are responsible for improving working conditions by offering jobs with secure contracts, allowing flexible working hours and control over one’s schedule.