Employment, retirement and pensions: the Victorian era as a golden age for the elderly

by Tom Heritage (University of Southampton)

Elderlyspinnera
Irish spinning wheel – around 1900
Library of Congress collection

For far too long, our elderly ancestors have been viewed through the prism of the National Health Service and the modern welfare state: old people are regarded as a burden, taking out of society rather than contributing. In contrast, this study of census data for five counties across England and Wales from 1851 to 1911 reveals a reciprocal relationship between those living in old age and wider society.

First, across the whole period, 86-93% of men aged 60 and over were in employment. Even if we exclude those in workhouses, the figure is 80-85%.

Most old men worked in agricultural and general labouring, although an increase was evident by 1911 in the mining industry in Glamorgan and metal manufacturing in Sheffield. Bricklaying, house painting, dock labouring and commercial sales were also pursued in urban areas. Labour force participation rates were higher among men in their sixties than among men in their seventies and eighties.

Second, from 1851 to 1911, between a sixth and a third of women aged over 60 were in employment. Although their occupations were less diverse than those of men, the majority were based in domestic service.

Old women were also involved in cotton and silk textiles and in the manufacture of straw hats. Over time, though, the employment rates of old women did not increase like those of men, owing partly to foreign competition in Asian straw imports and French silks.

Third, retirement was not an innovation brought about by the creation of old age pensions. As early as 1891, over 13% of old men were described in the census as ‘retired’, with high rates in the areas favoured by today’s retirees: the coastal areas of Christchurch and Portsmouth in southern England. More old people retired than went into the workhouse.

But retirement was only an option for those who had inherited or managed to accumulate wealth, such as former smallholders, grocers, innkeepers, civil servants or military officers. Others who lacked land or capital, for example agricultural labourers, or boot and shoe makers were forced to resort to the Poor Law.

Even then, this did not always, or usually, mean the workhouse. Welfare assistance to old people in their own homes was common, especially for women. ‘Outdoor relief’, usually around 2s 6d per week, was issued as a weekly ‘pension’.

Moreover, the women who received it were not always as old as those entitled to a pension in the modern era: in Yorkshire in 1891, over 10% of old women described as ‘on relief’ were under 66, which will be the minimum pension age for women by 2020.

So is it really true to say that nowadays, ‘the elderly have never had it so good’? In a sense it is, as old people lead healthier and longer lives today than they have ever done.

But it would be wrong to conclude that old people in Victorian times were largely condemned to lives of pain and poverty. They had a wide range of experiences, and many had access to employment opportunities and sources of assistance that are no longer offered.

In terms of present day policy, we might learn something from our Victorian forebears about ways to integrate the general population in their sixties into the workforce, so that they can contribute to society as well as receive welfare.

WELFARE SPENDING DOESN’T ‘CROWD OUT’ CHARITABLE WORK: Historical evidence from England under the Poor Laws

Cutting the welfare budget is unlikely to lead to an increase in private voluntary work and charitable giving, according to research by Nina Boberg-Fazlic and Paul Sharp.

Their study of England in the late eighteenth and early nineteenth century, published in the February 2017 issue of the Economic Journal, shows that parts of the country where there was increased spending under the Poor Laws actually enjoyed higher levels of charitable income.

refusing_a_beggar_with_one_leg_and_a_crutch
Edmé Jean Pigal, 1800 ca. An amputee beggar holds out his hat to a well dressed man who is standing with his hands in his pockets. Artist’s caption’s translation: “I don’t give to idlers”. From Wikimedia Commons

 

 

The authors conclude:

‘Since the end of the Second World War, the size and scope of government welfare provision has come increasingly under attack.’

‘There are theoretical justifications for this, but we believe that the idea of ‘crowding out’ – public spending deterring private efforts – should not be one of them.’

‘On the contrary, there even seems to be evidence that government can set an example for private donors.

Why does Europe have considerably higher welfare provision than the United States? One long debated explanation is the existence of a ‘crowding out’ effect, whereby government spending crowds out private voluntary work and charitable giving. The idea is that taxpayers feel that they are already contributing through their taxes and thus do not contribute as much privately.

Crowding out makes intuitive sense if people are only concerned with the total level of welfare provided. But many other factors might play a role in the decision to donate privately and, in fact, studies on this topic have led to inconclusive results.

The idea of crowding out has also caught the imagination of politicians, most recently as part of the flagship policy of the UK’s Conservative Party in the 2010 General Election: the so-called ‘big society’. If crowding out holds, spending cuts could be justified by the notion that the private sector will take over.

The new study shows that this is not necessarily the case. In fact, the authors provide historical evidence for the opposite. They analyse data on per capita charitable income and public welfare spending in England between 1785 and 1815. This was a time when welfare spending was regulated locally under the Poor Laws, which meant that different areas in England had different levels of spending and generosity in terms of who received how much relief for how long.

The research finds no evidence of crowding out; rather, it finds that parts of the country with higher state provision of welfare actually enjoyed higher levels of charitable income. At the time, Poor Law spending was increasing rapidly, largely due to strains caused by the Industrial Revolution. This increase occurred despite there being no changes in the laws regulating relief during this period.

The increase in Poor Law spending led to concerns among contemporary commentators and economists. Many expressed the belief that the increase in spending was due to a disincentive effect of poor relief and that mandatory contributions through the poor rate would crowd out voluntary giving, thereby undermining social virtue. That public debate now largely repeats itself two hundred years later.

 

Summary of the article ‘Does Welfare Spending Crowd Out Charitable Activity? Evidence from Historical England under the Poor Laws’ by Nina Boberg-Fazlic (University of Duisberg-Essen) and Paul Sharp (University of Southern Denmark). Published in  Economic Journal, February 2017