Demographic trends are encouraging governments to promote `productive' ageing, according to Professor Philip Taylor, writing in The Age newspaper: 

"The federal government's announcement this week of policies targeting older workers on the back of the third intergenerational report is potentially an important step forward in prolonging working lives and helping those who can and who wish to once again take their place in the labour market.

"Workforce ageing is now high on the agenda of policymakers in most developed countries. Demographic trends are encouraging them to develop and propagate the notion of ''productive'' or ''active'' ageing.

This stance contrasts sharply with that of the 1970s through to the 1990s, when policies focused on the need to remove older workers from the labour market to reduce high youth unemployment.

"With increasing policy interest in the issue, the question arises as to whether we are on the verge of a new era of employment characterised by a prolongation of working life.

"Important changes are clearly under way. Internationally there is a broad consensus on the economic and social benefits of extending working lives. Against this backdrop measures are being taken aimed at encouraging later retirement, promoting skills acquisition, and generally improving the employability of older workers.

"Central to current debates about working later is the notion of flexible retirement, characterised as a gradual letting go rather than an abrupt severing of the link between employee and employer, often in the form of part-time working.

"In this context, several new policy approaches are emerging around the world. For instance, Finland has introduced the Finnish Program on Ageing Workers, which is aimed at tackling the whole work environment rather than isolated features by developing good practice around the retention of older workers, as well adapting employment services to better serve their needs.

"In Germany reforms have focused on raising the age of exit from the labour force, including closing off early retirement pathways, increasing the retirement age (to 67 by 2029) and introducing new labour market programs.

"In Japan, legislation requires that employers actualise extension of employment up to age 65 and a ministerial committee has recommended that the government's next policy target should extend the employment age to 70.

"In the Netherlands, policy objectives include making paid employment more attractive, preventing involuntary retirement, and giving the responsibility for funding early retirement to individual workers.

"Supporting the employability of older workers has been a major policy theme internationally. In Britain, for instance, New Deal 50 Plus offers support and advice for people aged over 50 to find work.

"A more flexible approach to retirement has also come in measures to promote gradual retirement. There seems to be a strong case for policies that offer a phased transition from work to retirement. For employers, gradual retirement allows skill and knowledge retention; for older workers, it may facilitate an easier adjustment to retirement; and governments can increase tax revenues and reduce social welfare expenditure.

"Surveys demonstrate a willingness among older workers to continue working under certain conditions, namely if they can reduce or work more flexible hours.

"What are the realities of flexible working for older people? For some, undoubtedly, flexibility offers certain benefits, but often neglected in current debates is consideration of those for whom a gradual switch from working to not working is not an option.

"In Australia, rates of involuntary part-time working have been increasing for many years and critically, older workers, particularly women, are more likely to be underemployed for great periods of time than younger ones. This may reflect the chronic Australian problem of poor superannuation provision among women. Such evidence suggests there are constraints on the choices of older workers and indicates that a singular public policy position of one-way transitions from full-time to part-time work and on to retirement is naive.

"What, then, should be the basic principles for the development of public policies on older workers?

"In the first place, policies must be capable of meeting the needs of diverse groups. For example, pension reforms could disadvantage some people, forcing them to remain economically active and, if they lack abilities that are valued in the marketplace, into a form of prolonged unemployment, with the potential for a poor quality of later life. While early retirement is at present unfashionable in policy circles, it offers the only prospect of a dignified exit to many older people.

"Second, there is a need to integrate different strands of public policy. Currently rather narrow economic imperatives are taking precedence over wider social ones, perhaps explaining the Australian government's use of the rather narrow term ''productive'' over the rather more inclusive ''active'' ageing in its policy announcement this week. For instance, how older women might sustain paid work, how to consider the unpaid caring duties which usually fall to them, not mention community engagement roles, while combining these with leisure, do not seem to have been much considered.

"Third, there needs to be a shift to what is known as a ''life course'' approach. This would emphasise measures such as lifelong learning and health promotion that focus on minimising risks over a working life, rather than late-career remedial measures that may help only a few and are expensive.

"Whether the recent public policy shift towards the inclusion of older workers foreshadows a long-term improvement in their fortunes is as yet unclear. Most observers of this policy volte-face have been uncritical, as it ties together current perspectives on the benefits of productive ageing with apparently self-evident economic and social realities. Critical commentaries on the prospects of many older people achieving active ageing and, if they do, how it will be manifested, have been rare.

"Unless business can be persuaded that older workers are a worthwhile investment, unless business is at the vanguard of an employment revolution in choice and flexibility, a plausible scenario is that many older workers will continue to face the now familiar problem of restricted opportunities and with it, restricted prospects of a happy old age."

Philip Taylor is professor of employment policy at Swinburne University of Technology.