Older Workers, Employer Behaviour and Public Policy

Abstract

This special issue of The Geneva Papers focuses on employer behaviour towards older workers and the interface between paid employment and public policies affecting this group. The following articles from France, Germany, Japan, the U.K., Canada, the U.S. and Switzerland consider the changing position of older workers in internal labour markets and review trends in public policy affecting this group, as there is an increasing recognition that workingliveswillneedtobeprolonged,thatis,peoplewillhavetoworktoalaterage,inorder to counter problems associated with population ageing. Over almost three decades, labour force participation rates among older workers have declined markedly in most of these countries (a notable exception being Japan) as documented in Table 1. Since the 1970s, economic, structural and technological changes havehadamajorimpactonbothpublicandprivatesectoractivities.Thedeclineoftraditional industries such as manufacturing and mining have impacted the ability of older people to sustain their position in the labour force, while the growth of the service sector and the evolution of new areas, such as financial services, has led to the demand for new sets of attributes, skills and abilities, which older workers may not possess. In the public sector, factors such as the privatization of utilities, the tightening of public expenditure and ‘‘value for money’’ approaches, and in the private sector, globalization of markets and intensive competition between domestic producers and overseas providers have effectivelychangedthecomplexionandshapeofemployment.Thedrivebyorganizationsfor increased productivity and efficiency savings has taken the form of workforce reduction exercises, the de-layering of organizational hierarchies, and the outsourcing of some functions and activities, which have had a disproportionate impact on older workers who had been targeted for early retirement or redundancy. In some countries, for example France and Germany, public policy has been explicitly targeted at removing older workers from the labour force in favour of younger workers, and therehasbeensupportforemployerswishingtoundertakedownsizingexercisestargetingthis group.Elsewhere,sucharelationshipislessclearlydiscernible.Inmostcountries,thesupport of trade unions has usually been readily forthcoming and sometimes older workers themselves have been willing participants if the compensation has been generous. Theimpactofsocialsecurityonlabourforceparticipationhasbeenthesubjectofdebate among researchers (Guillemard and Rein, 1993). Gruber and Wise (1999a, b) argue that socialsecurityprovisionsinmanycountrieshavesometimesofferedanenormousincentiveto early retirement and may account for a significant part of the long-term decline in economic activity rates among older males. In continental Europe, disability and unemployment programmes have often provided generous early retirement benefits well before the official retirement age.