Early Retirement in Germany 1

Abstract

Early exits are promoted not only by a system of informal rules executed by corporate managers, works councils and unions, and the older workers themselves but also by three formal provisions of labour law and social policy legislation effective for all companies in Germany. This chapter describes the labour market participation of older people, and outlines the most important institutional pathways out of the labour force. It addresses the economic and demographic conditions that affect companies and the social security system. The chapter deals with a description of the dominant normative principles and actor constellations governing the German corporatist model at the beginning of the new millennium. While most regulations of the work-retirement transition seem to be rather traditional, it may be of interest to also present an example of how new labour market policies affect the established corporate strategy of early exit.