James Nazroo is a professor of sociology at Manchester University and a partner investigator with CEPAR at UNSW Business School. He recently gave a public lecture on inequality in later life for the UNSW Grand Challenges program. Nazroo spoke with Julian Lorkin for BusinessThink.

An edited transcript of the conversation follows.

BusinessThink: So first, can we define it? What do we mean by inequalities?

James Nazroo: Inequality really describes an unequal distribution of resources of any form. So they could be economic, they could be social or they could be health. I particularly focus on health inequality, so, how health varies across segments of the population.

Those segments can be then defined in a whole variety of ways. You could think about gender, you could think about migration or ethnicity, or you could think about socioeconomic position. A lot of my research focuses on socioeconomic position – how and why people who are wealthier have better outcomes in later life.

BusinessThink: What does your research show about the amount of wealth that people have accumulated or, indeed, the jobs that they're doing in the last few years before they retire?

Nazroo: The research shows very, very clearly [that there are] very, very large gaps in health between the richest and the poorest in our society. If you have a look at the richest half of our society and compare them with the poorest half, there's something like a 15-year gap in health. Rich people aged 75-plus have the same kind of health as poorer people aged 50 to 60. So, very, very big differences in health.

'Why poorer people have poorer outcomes than richer people is not to do with mental activity and mental challenge; it’s to do with the circumstances in which they live'

– JAMES NAZROO

What drives that is the crucial question, of course. Just to pinpoint a couple of things: if you choose to retire, your health is much better than if you're forced out of work. If you work in conditions where you have control and autonomy in your workplace, you have much better health than if you work in conditions where you have no control, no autonomy in your workplace.

If you're engaged in social activities – volunteering, clubs, stuff like that – then you have much better health than if you are not engaged in those kind of things. And if you're engaged in highbrow cultural activities, again you have much better health than if you aren't engaged in those kind of activities.

And my argument is – and a lot of my research shows – that the core mechanism that drives this is your perceived social status in society. So, where you think you fit in society, at the top or at the bottom.

The research again shows that this isn't driven by personality traits or optimism or pessimism, though optimism and pessimism do flow from your circumstances, of course. But those aren't the driving factors; it's the circumstances that are the driving factors.

BusinessThink: And what are those circumstances?

Nazroo: Things like the amount of money you've got; the way in which you work; the kind of conditions under which you work; how that leads to retirement through unemployment or through chosen retirement; the kind of resources you have in retirement in terms of money, housing and so on; how you can enjoy your life or not; and the way in which you're connected to broader society in retirement.

BusinessThink: You briefly mentioned that engaging in highbrow culture, engaging your brain, meant that you were much more mentally active in the later years of your life. That seems to be very important and a lot of research seems to highlight this. But can you tell me why that seems to really impact so much?

Nazroo: Engaging in mentally challenging activities is thought to improve your cognition or maintain your cognition over time. I'm arguing from my research that this isn't actually the key thing to explain inequalities. It may at an individual level describe differences but it doesn't describe differences between segments of the population. So why poorer people have poorer outcomes than richer people is not to do with mental activity and mental challenge; it's to do with the circumstances in which they live.

BusinessThink: What can we learn from this? Obviously, we can see that if you retire with a lot more money you'll actually enjoy life a lot more, and equally if you've been working very hard you may enjoy having some time away from it. But what are the policy initiatives we can learn from this?

Nazroo: We're in the middle of a huge number of policy reforms in relation to ageing populations. One of the big challenges of our time is the ageing of the population. So, we need policy reforms in terms of healthcare, social care, pensions, living environments, trying to make them more friendly for older people. In all of those situations we can think very seriously about how we can do those policy reforms to decrease inequalities – if we're bothered about inequalities. Obviously I am.

'I would argue that not only do we need to keep people working longer but we need to keep them working in good quality employment'

– JAMES NAZROO

So why do pension reform that increases inequality? We can have efficient pension reforms that reduce inequality. Why do housing reforms that don't improve housing for poorer people rather than older people with money? Why think about age-friendly cities without thinking about where poorer older people sit in age-friendly cities and improving their environments? And so on.

BusinessThink: And what do you mean by age-friendly cities?

Nazroo: There's a global movement, driven by the World Health Organisation, which is about trying to get cities to think about the ageing of their populations and making the city more friendly to older people – so in terms of access to cultural resources, in terms of walkability, toilets, green space, all of those kind of things. Public transport. Just trying to make those things more friendly for older people.

Manchester, which is where I'm from, has been one of the driving cities in the age-friendly movement.

BusinessThink: And how about policies to ensure that people can stay in work for longer if they actually choose to?

Nazroo: Employment is important for a whole number of reasons, but particularly with an ageing population. Keeping people working longer is a good thing, and we have a lot of policies that are trying to keep people working longer.

I would argue that not only do we need to keep people working longer but we need to keep them working in good quality employment – so, an employment where they have some control over their working lives, which again impacts positively on their wellbeing.

BusinessThink: And what do you mean by having control over their working lives?

Nazroo: You can think of the classic examples of someone working on a production line and the speed of the production line being completely out of their control, as opposed to someone working in an office who can go in when they want to, do the work that they feel they want to at the pace they need to, and then go home, have their coffee break when they need, and so on.

BusinessThink: And equally, I've seen some policies, particularly in Australia, that are trying to encourage older workers to, say, work in a hardware store for three or four hours a week. They've got the knowledge of many, many years so they can use that on the shop floor. That means they interact with people. How important is interacting with other people and just keeping the communication going as an older person?

Nazroo: This seems to be a classic thing across the developed world, trying to get older people to share their skills, and older men [working] in DIY stores is the example that people often use. And I think what you get there is not overly demanding work – so people aren't out of control of their work habits, which is really very important – using skills that they have; and getting a return for those skills being recognised, and being valued because of those skills.

BusinessThink: You mentioned men. How about differences between the sexes as well? Is there a difference between how men can retire and enjoy their retirement, and women?

Nazroo: There are a number of very important inequalities related to gender, and inequalities that are evolving over time. But you can think about the ways in which people have career breaks in relation to having children, and come back to part-time work and so on, and what that means in terms of their pensions and their pension entitlements in later life, which produces really quite dramatic inequalities between men and women in terms of economics.

We can also think about the ways in which people's roles change as they retire, or don't change as they retire, and what that means in a family and in a couple. All of which end up generally producing poorer health outcomes for women, even though their life expectancies are longer.

BusinessThink: And how about intergenerational inequality?

Nazroo: Intergenerational inequality has become the focus of policy in terms of later-life inequality – so instead of thinking about inequalities within the later-life generation, thinking about how much better off older people are than their younger counterparts.

It's kind of classically talked about in terms of housing wealth – so, how older people have housing and lots of wealth associated that housing, and younger people actually can't afford to buy properties. And that's described as a big inequality.

I think it really misses the point. It really very badly misses the point. The key point is the inequality within generations. Wealth is transmitted across generations, so those people who own their properties in later life pass that wealth down into younger generations, either in terms of early payouts so that people have a deposit to buy a house, or when they die. Obviously that wealth is inherited.

The people who are younger who can't afford property are those who are poorer. It's the in-generation inequality that's really important.

BusinessThink: But how can we change that in a society where house prices in many developed countries have now reached the level where many people just treat a mortgage like renting a house, so that they're never physically going to be able to own it.

Nazroo: Those 'most people' are the poorer segments of our population, I would argue. So those who are richer will get an inheritance from their parents or will get a donation from their parents to buy a property. The problem is not so much that older people own property; some older people own property, a lot of older people don't. Some older people have really significant housing wealth; most older people do not. It's the inequality within that generation and then how that is distributed downwards which is the problem.

BusinessThink: Is there an easy solution?

Nazroo: Well, the easy solution is not there, of course, because wealth inequalities are a really intractable problem. How do you deal with wealth inequalities when people do not want to hand over their wealth to other people? Of course they don't; why would they?

So it's really about thinking about forms of taxation that deal with inherited wealth in a redistributive way.

BusinessThink: Are there two or three important changes we could make to the workplace, and come to that our working lives, to ensure that the whole of society can retire well?

Nazroo: I would probably argue for three important changes. One relates to pension reform – so, thinking about pension reform in a way that equalises pensions rather than increases inequality in pensions, which is what is happening at the moment.

A second is in relation to later-life working and thinking about the ways in which you can facilitate high-quality work for older workers. That really means about work that is flexible and that people have control over, given other demands that they might have in their lives.

And then the third one is about how we retire – so planned retirement, chosen retirement, is really very important.

For more information read Inequality the unsolved burden on older people.