MEN’S LATE CAREERS AND CAREER EXITS IN ESTONIA

Abstract

1. Introduction The ageing of the populations in European countries is giving rise substantial economic and social problems. Reduced inflows of younger workers into the labour market and the longer retirement periods with increased life expectancy have altered the age structure on the labour markets and have put pressure on the retirement systems (Auer, Fortuny 2000). Previous policies of reducing labour supply by early retirement are increasingly affected by the need prolong working life. As labour market participation and employment fall with age, demographic ageing increases the need for efforts in raising the employment rate of older workers. The 2001 Stockholm European Council agreed to set an EU target for increasing the average EU employment rate among older women and men (55-64) 50% by 2010 (Employment in Europe 2003). The Barcelona European Council of March 2002 then concluded that efforts should be stepped up increase opportunities for older workers remain in the labour market. Economic and social reforms in Central and Eastern Europe have had a profound impact on the population development trends. The fertility rate has declined and economic crisis resulted in the shortening of life expectancy. The combined effect of these two factors has contributed a rapid ageing of the population. According the United Nations demographic projection the average share of males aged over 50 equalled 26% in Estonia in 2000 and is expected reach 38% in 2030 while the average share of women aged over 50 will grow from 36% in 2000 47% 30 years later (United Nations 2001). The growing old-age dependency ratio shows that the working-age population is expected support an increasing number of old people (Fortuny et al. 2003). These trends will call for an increase in economic participation of older persons in order prevent future labour shortage in the countries of Central and Eastern Europe (CEEC), including Estonia. The situation in these countries is more complex compared with other European Union countries because the development in the 1990s can be interpreted in two contexts: as a transition from state socialism market economy, and as a movement from an industrial, Fordist model a post-industrial, post-Fordist model which concerns all developed countries (Terk 1999). These two developments intertwined. The socialist labour market was characterised by full employment, no open unemployment, strong regulations leading high employment security and job stability. Even more, life-long employment with one firm or in one profession was supported by the system. However, very liberal reforms stimulated massive restructuring of the enterprises and intensive reallocation of labour. Liberalisation transformed firms into economic units. As a result, overstaffing was reduced, social provisions were relinquished and unemployment was unavoidable (Wagener 2002). The result was a sharp decline in the economic performance, i.e. in a short time the employment started fall (Cazes, Nesporova 2003). The majority of employed persons have voluntarily or involuntarily changed their jobs. A certain proportion of the redundant workers have not been able find a new job and remained long-tern unemployed. The vast changes in the labour market affected different groups in different ways. One ambiguous group has been the older workers. At the start of the transition, working pensioners were the first group be laid off everywhere, many countries introduced early retirement schemes avoid the long-term unemployment of older worker (Fortuny et al. 2003). There were hopes that jobs vacated by older workers would increase employment opportunities for young labour market entrants. This led a substantial drop in the average age at which individuals retire from the labour market, which was already rather low at the beginning of economic transition. Also in Estonia, the sharpest decline in employment in the early 1990s could be observed among older workers. …