1.1. Greying and working
For demographic reasons it is necessary to increase employment rates of older workers or – more generally – extend the active working life. This is part of a comprehensive strategy to cope with the fact of aging populations in European countries.333 This is reflected in numerous economic policy guidelines and suggestions, for example in the growth strategy of the European Union, the so-called Lisbon Agenda.
Until the recent past, older workers in industrialised countries were tending to leave the employment market at an increasingly younger age, but the situation has now changed.
In a context marked by ageing and restricted manpower, the improvement of the situation of seniors in the employment market has become one of the major concerns of governments. Keeping seniors in working life longer results in an increase of the available active population, thereby improving the equilibrium of social security systems, in particular the retirement systems, and stimulating economic growth.
From the 1970s onwards, the great majority of OECD countries witnessed a drop in the number of men working after age 55. The reason for this decline was mainly due to the intentional implementation of early retirement policies: to respond to the rise in youth unemployment, many countries willingly encouraged early retirement by offering various relatively advantageous forms of departure (early retirement, unemployment with an exemption from job seeking, forced early retirement based on economic grounds, claiming a disability pension, etc.).
This situation is in the process of being phased out, as demonstrated by the trend reversal which has been taking place for several years and which has now been confirmed. Analysis of the change in employment rates in all OECD countries shows that after having significantly fallen during the 1970s and 1980s, the employment rates
333 European Central Bank, 2003
of workers aged between 55 and 64 stabilised between 1995 and 2000 and has constantly risen since 2000 (Figure 3).
Figure 3.
Employment rates in OECD countries and ageing the EU (19 countries), men334 aged between 55-64
Source: OECD Database of the active population
1.2. Common trends, disparate results
The trend change occurred after 2000 in the majority of countries. Some countries have achieved a remarkable rise, having increased their employment rate by more than 10 points in a period of seven years, such as the Slovak Republic (15.9 points), Germany (13.4 points), Finland (11.1 points). In 2007, eight EU-19 countries achieved or even exceeded the Stockholm objective: an employment rate of workers aged between 55 and 64 of at least 50%. The Netherlands, which initially had one of the lowest employment rates of persons aged over 55 in Europe in the 1990s, achieved a spectacular leap by
334 There was not data available for women.
increasing its employment rate by more than 21 points between 1995 and 2007. Only a minority of countries continue to record low employment rates of older workers, although they have achieved noteworthy progress, for example in Hungary, Poland and Luxembourg.
Figure 4.
Countries with increased employment rates for men335 aged between 55 and 64 (selection of countries)
Source: OECD Database of the active population
1.3. A break with previous practices
There are several reasons for this trend reversal. Economic growth is one of the arguments frequently put forward but it has not been strong enough during the recent period to explain this progress which, in some countries, exceeds ten points. However,
335 There was not data available for women.
this reversal marks a major break with the policies applied over several decades and demonstrates a paradigm shift with regard to seniors.
The measures taken to boost the employment of seniors are undeniably starting to be successful and countries have become aware of the need to extend active life in order to face the challenges linked to population ageing. Various strategies have been drawn up to encourage seniors to continue working, which may be classified in three types of action:
1) Dissuasive measures in relation to early retirement from active life by means of reform of the pension and/or all of the social security system;
2) measures aimed at making employment more attractive for older workers and encouraging employers to maintain or recruit seniors; and
3) actions aimed at changing the negative portrayal of older workers.336
Several countries have attempted to balance their budgets by delaying the retirement age for older workers. At the same time, many employees of retirement age have chosen to stay in the workforce due to personal financial problems.
In the United Kingdom, the Office for National Statistics recently revealed that 8.5 per cent of citizens over the age of 65 were employed in a three-month period ending on 10 October 2009 compared to 7.3 per cent during the same time in 2008, according to The Financial Times.
In fact, the employment rate is much more hopeful for older workers than their younger counterparts. Younger demographics are suffering from a lack of jobs and the problem appears to be getting worse. Unfortunately, this trend of global baby boomer human resource management has become a source of tension for many younger people in Europe. Those born after the baby boomer generation feel that they have been pushed out of the workforce by mature employees who aren't retiring. Nowhere is this more apparent than in Europe, where protests have erupted in parts of Greece and Italy over high youth unemployment. The problem is also pervasive in Spain and Portugal. The unemployment rate for young people is 40 per cent in Spain and 28 per cent in Italy.
―By now, only a few people refuse to understand that youth protests aren't a protest against the university reform, but against a general situation in which the older generations have eaten the future of the younger ones. ‖337
Many countries have raised the retirement age to support the sustainability of pension systems, which may be perpetuating the problem of youth unemployment. Businesses
336 http://www.issa.int/News-Events/News2/Analysis-Keeping-older-workers-in-employment-A-policy-success/%28language%29/eng-GB (03.02.2011)
337 Former prime minister Giuliano Amato told Italy's Corriere della Serra newspaper, according to the news source.
are hesitant to hire new workers because older employees are often tenured and expensive to fire.
One 2005 survey conducted by Investments & Pensions Europe magazine found that 63 per cent of respondents in managerial positions believe that employers should be able to force older workers to retire, while only 47 per cent believe that the state should mandate retirement age. The survey also found overwhelming support (95 per cent) for gradual or phased retirement and one manager suggested that retirement age workers should only be allowed to stay employed if they are financially desperate.338