Opinion

Older Women in Israel Shun Retirement, Choosing to Stay on the Job

The debate over raising the retirement age flies in the face of the reality that, on average, women work to nearly 67.

Gil Eliyahu

Among Israeli women aged 63, 83% who are in work continue to do so even though they are legally entitled to retire. Seventy percent stay at their jobs at age 64, while 57% remain after they’ve reached 65.

These surprising figures come from the Bank of Israel, which goes a long way to explaining why even though women can start getting their pension at 62, on average they only retired at age 66.6 in 2015 (the last year for which figures are available).

That means Israeli women are choosing to work until the legal retirement age for men, 67, and makes the bitter fight being waged by lawmakers over raising the retirement age for women look kind of ridiculous.

MKs Shelly Yacimovich (Zionist Union) and Zehava Galon (Meretz) are standing firm for a woman’s right to retire at 62. But the women they are defending evidently think otherwise. There is a good financial and social argument for what the workers are doing.

With the life expectancy for Israeli women now 86 years and rising, it is not good for their mental health to quit the world of work when that means 24-plus years sitting around the house.

Financially, they stand to gain a lot by waiting to get their first pension: A woman who retires at 67 will get 47% more a month than one who retires at 62. Multiple that by 19 or 24 years, and that has a big impact on her standard of living.

The lawmakers are making a second mistake in claiming that the labor market isn’t welcoming to older women. Like their female employees, employers realize it doesn’t make sense to send someone off to retire at 62 when life expectancies are growing by two months every year and stretching the viability of pension plans.

Another factor leading more women to work past age 62 is their rising level of education: They are less likely to be working in physically demanding jobs and are more likely to have rewarding careers which they aren’t anxious to end.

The switch to defined-benefits pension plans has also encouraged the phenomenon, because the pensioner gets a lump sum that ends up being spread out over fewer years if she retires later – as against a defined contribution plan that pays out a fixed monthly allowance.

Women have studied the map and are taking their own routes, regardless of what the law officially entitles them to.

Moreover, they face little age discrimination.

Figures for employment of older women show high rates of workforce participation, low rates of joblessness and no sign that their pay diminishes as they grow older.

Rather, the problem is for women who stop working at age 62 – and they account for 55% of the total.

For the 12% or so who never held a paying job and are defined as housewives by the National Insurance Institute, they are entitled to no allowance until they reach 68-70. The great majority of these women are Israeli Arabs, and officials have done nothing to correct a problem so widespread among them.

Another 10% get disability allowances, meaning another 33% have a work history – and they should be at the center of the public debate over raising the retirement age.

Many are teachers, who can retire at 55 and wait till 62 before they begin receiving their old-age allowances. If the retirement age is raised to 67, will they wait 12 years? Will they start a second career?

In all events, society has an interest in women continuing to work. The cost of not raising the retirement age to, say, 64 is 5.6 billion shekels ($1.5 billion) to the veteran pension funds and 550 million shekels to the NII annually. The economy loses 0.3% of growth, if not more, according to the Bank of Israel.

The time has come to end this unnecessary controversy about the retirement age for women. There aren’t any alternative facts.