Academic Literature

Older Workers in EU – Integration strategy with job search training, hiring subsidies and health promotion are the most effective

Although the labour market situation of older workers has significantly improved over time, opportunities to work at older age still vary considerably across EU countries. To trace diverging developments and to assess what works best in retaining employment and bringing older unemployed back to work developments in five countries are analysed: Germany, France, the Netherlands, Norway and Austria.

By reviewing the available evidence we find that the strengthening of financial incentives (or more precise ‘financial penalties’) induced by pension reforms and the phasing out of countryspecific pathways to early retirement have had more effect on extending working lives than anything else. Re-integration after a job loss and the risk of persisting unemployment, however, remain specific problems of the elderly. Government sponsored programs to support the re-integration of unemployed senior workers show rather mixed results.


In theory, the labour market position of older workers may be related to demand-side as well as supply-side incentives. Efficient policies to retain and re-integrate older workers depend on a wide range of interrelated factors. The available evidence suggests, however, that financial incentives have been decisive in extending working lives. Pension reforms raising the statutory pensionable age and introducing actuarial deductions for early retirement as well as the phasing out of early pensions and functionally equivalent schemes and side tracks into a disability status have more effect on average retirement behaviour than anything else.
The rather limited research on the role workplace policies and practices play in encouraging longer working lives such as employer provided training or an active health management finds at best small positive effects.

Despite considerable progress made in achieving the policy goal of increasing employment among older workers, re-integration after a job loss and the risk of persisting unemployment remain specific problems of the elderly across all countries under scrutiny. All in all, there does not seem to be an easy solution to the poor labour market situation of older unemployed. Government sponsored programs to support the re- integration of unemployed senior workers show rather mixed results. Beyond demand sided hiring barriers such as a perceived lower productivity, older unemployed suffer not seldom from multiple obstacles such as the co-existence of lacking skills and health problems. Evaluation findings show that individualised support following a common integration strategy including measures like job search training, hiring subsidies and health promotion seem to be the most effective overall approach.

Hence, there is a role for measures targeted specifically at older worker but they should be integrated into individual action plans. A major challenge remains for (low income) groups nearing retirement. They should be better activated as most evalua- tion studies have shown low or no effects for the age group 60 plus. Beyond a more individualised approach taking into account personal capacities according to the indi- vidual state of health, adapting employers’, employees’ and jobseekers’ notions of what is “old” and “near retirement” to the changing institutional circumstances remains an important challenge for the future.

Chosen excerpts by Job Market Monitor. Read the whole story at IAB Discussion Paper Details | IAB

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