Managing an ageing workforce: workplace retention practices and early labour market exit

Abstract

This study addresses a critical gap in our understanding of how the employer and workplace context influences the working career of older employees. Leveraging linked employer–employee data, this study examines the impact of workplace retention practices on an early labour market exit for employees aged fifty-five to sixty-four in Denmark. The findings reveal that, for those eligible for early retirement, work environment adaptation, re-employment of retired employees, and positive views of older employees’ productivity significantly contribute to avoiding early retirement. However, these workplace retention practices do not influence unemployment, emphasizing their effectiveness in postponing early retirement rather than mitigating job loss. Moreover, the analysis shows that employees with managerial roles and high skill levels benefit more from workplace retention practices in terms of avoiding both early retirement and unemployment. This finding highlights the employer’s key role in shaping inequalities in an ageing workforce by selectively providing opportunities to extend working lives.