Old-age Employment Research Articles

Varying effects of public pensions: Pension spending and old-age employment under different pension regimes

Socioeconomic consequences of pension reforms have often been discussed without careful consideration of institutional contexts, despite the fact that institutional designs of public pensions differ substantially across countries. This study argues that the outcomes of pension reforms vary depending on the institutional structure of public pensions, by showing that the associations between public pension spending and old-age employment rates of different socio-demographic groups vary across different institutional contexts. Using time-series cross-section data from 20 European countries and the United States from 1998 to 2019, the study examines how changes in public pension spending ‘per older person’, a comparable measure for the welfare state effort towards old-age income security, are associated with gender- and education-specific employment rates in old age. The study also explores how these associations differ under different pension regimes, constructed based on the degree to which financing and benefit structures exhibit redistributive orientations. The results reveal complex gender and educational gradients in the relationship between public pension spending and old-age employment. Female employment rates, especially among the low-educated, are more sensitive to changes in pension spending in the ‘Beveridgean’ regime that focuses on basic income security. In the Bismarckian regime characterized by earnings-related pensions, educational differences in the marginal effects on male employment rates are, in particular, larger. Future pension reforms balancing the goal of activation and social equity should therefore consider the longstanding institutional design of public pensions.

Beware of the employer: Financial incentives for employees may fail to prolong old-age employment

We show that a stepwise increase in the normal retirement age (NRA) by up to five years and the introduction of actuarial pension deductions for retirement before NRA was ineffective in prolonging employment of older men after early retirement age. We argue that the ineffectiveness of the German pension reform resulted from a change in employer behavior that was mainly induced by a recession during the implementation period of the pension reform. Employers seem to have nudged their employees to use a bridge option that was introduced with the pension reform (partial retirement) or a traditional bridge option (unemployment). These bridge options allowed an early retirement age (ERA) of 60 instead of the only alternative early retirement option with an ERA of 63. Bridge options therefore offered employers an opportunity to terminate employment considerably earlier and exert more influence over the employment exit age. We argue that without a change in employer behavior, neither using one of the bridge options nor the earlier employment exit would have been utility maximizing for the individuals affected by the reform.

Pensions and Timing of Retirement: The Case of the Public Service Pension Scheme in Uganda

Unsustainable defined-benefit public pension scheme, rising life expectancy, and high level of unemployment endanger the socioeconomic and political stability of Uganda’s economy. This research approaches the problem from labor supply point of view by: (i) analyzing the effect of the public service pension scheme on timing of retirement; (ii) investigating the required early retirement incentives that would increase employment in the public service; and (iii) determining the predictors of postretirement employment in the public service in Uganda. Using a cross sectional secondary dataset of the retired public servants from the Uganda’s Pension Department of the Ministry of Public Service (2016), this study finds the model fitting the observed aggregate retirement behavior very well. Results reveal: first, that the retirement conditions in the public service’s pension scheme in terms of the: mandatory retirement age (MRA), early retirement age (ERA), minimum tenure (MT), and pension benefits; significantly influence timing of retirement. This implies that the public service pension scheme in Uganda can be used as a fiscal tool for addressing labor supply challenges in the country.Second, about 20 percent increment in the monthly pension benefits, and 10-year increment in ERA jointly with a 5-year increment in MRA raises the likelihood of new jobs pace by up to 12.2 percent and 30 percent respectively, through early retirement.This implies that these early retirement incentives can be used to achieve intra-generational equity where some previously employed public servants retire early and survive on pension benefits as few unemployed people join public service to earn a wage.Third, among other predictors, postretirement employment in the public service is explained by:entry age, tenure, and salary. These factors can be used by the government to achieve a sustainable pension scheme through oldage employment (increased labor supply) which reduces the years taken to claim pension benefits.

The cessation of rising employment rates at older ages in Australia, 2000-2019

Background In the first decade of the 21st century, employment at older ages surged in Australia, benefitting the Australian economy. Subsequent to 2010, however, employment rates at older ages ceased rising for older men and the increases were much more moderate for women.
 Aim The aim of this paper is to examine these older-age employment trends in more detail, particularly the association between older-age employment trends and the business cycle. Some attention is also given to alternative explanations related to changes in the characteristics of the population and industrial structure.
 Data and methods Two main data sources are used: published tables from the monthly Australian Bureau of Statistics Labour Force Surveys and the Australian censuses for the years 2006, 2011 and 2016. The methods used are primarily descriptive.
 Results Strong labour demand in the first decade of the 21st century stimulated the entry to employment of those out of the labour force, especially at ages 45-54 and especially for men. A cooling of labour demand following the global financial crisis terminated this process in the second decade. There were strong associations between older age employment and various socio-economic characteristics, but, in general, changes in the composition of the population or in the rates of employment by these characteristics did not contribute to the cessation of rising employment after 2010.
 Conclusions Employment rates at older ages in Australia in the first two decades of the 21st century were the results of shifts in labour demand before and after the global financial crisis. Policy related to the taxation of superannuation also induced workers with adequate superannuation, especially public sector workers, to continue working to at least age 60.

국내⋅외 액티브에이징 정책 비교와 리듬운동의 실현

The purpose of this research is to evaluate the maturity of Korean senior welfare policy by investigating on senior’s life status and social expenditure on senior’s welfare, and comparing it with the practice of active ageing policy over other countries in two aspects, governmental support for old-age employment and social activities. The research method is literature reviews on the precedent studies and the reports issued by Korea Institute for Health and Social Affairs, Ministry of Health and Welfare in Korea, WHO, EU, UN and OECD. The result of this study is that Korean senior health and welfare policy for active and healthy senior life reflects many important criteria of the active ageing policy, and that Korea is already a worldly recognized country of well-founded senior welfare policy with old-age employment project by Korea Labor Force Development Institute for the aged and nation-wide life-long education centers and leisure class. Some suggestions for further development of Korean senior welfare policy are to hold campaigns for perception improvement on old-age employment and to adopt company’s incentive policy for hiring seniors like European countries as well as to launch more rhythm exercise programs through life-long education centers.

Institutional Reforms of 2006 and the Dramatic Rise in Old-Age Employment in Germany

The authors investigate whether a cut in unemployment benefit payout periods enacted in Germany in 2006 affected older workers’ labor market transitions. The authors use rich administrative data and exploit a difference-in-differences approach. During 2004–2007, using monthly observations, they compare a reference group of 40–44 year olds with constant benefit payout periods to older treatment groups with reduced payout durations. Compared to the reference group, those groups with reduced payout periods had lower job exit rates, higher rates of finding a job, higher propensity to remain employed, and lower propensity to remain unemployed. These patterns suggest that the reform may have contributed to the recent rise in old-age employment in Germany.

Retention of Old-aged Human Capital in the Thai Automotive Industry

With increasing life expectancy and ageing societies, the employment of the elderly and the human capital that they represent increases in relevance. This research will address this issue by studying the value of old-aged human capital and the possibility of old-age employment in the Thai automotive industry. A mixed-methods research methodology was utilised by employing sequential exploratory strategies. Starting from a qualitative approach, 32 key informants were interviewed in-depth and it was found that old-aged employees, with a high level of experiences, high competency and tacit knowledge, are valued human capital in organisations, and employing these old-aged is possible on the basis of job matching between old-aged employees and employers. The reason for encouraging this employment is mainly the potential of the old-aged workforce itself. In the quantitative part of this paper, these findings are confirmed by the opinions of a total of 308 old-aged employees and human resource managers. Therefore, retention of old-aged human capital is suggested.

Retention of old-aged human capital in the Thai automotive industry

With increasing life expectancy and ageing societies, the employment of the elderly and the human capital that they represent increases in relevance. This research will address this issue by studying the value of old-aged human capital and the possibility of old-age employment in the Thai automotive industry. A mixed-methods research methodology was utilised by employing sequential exploratory strategies. Starting from a qualitative approach, 32 key informants were interviewed in-depth and it was found that old-aged employees, with a high level of experiences, high competency and tacit knowledge, are valued human capital in organisations, and employing these old-aged is possible on the basis of job matching between old-aged employees and employers. The reason for encouraging this employment is mainly the potential of the old-aged workforce itself. In the quantitative part of this paper, these findings are confirmed by the opinions of a total of 308 old-aged employees and human resource managers. Therefore, retention of old-aged human capital is suggested.

Az idősödő korcsoport munkavállalását meghatározó stratégiai tényezők

The Labour Market Research Group at the Faculty of Culture, Education and Regional Development of the University of Pécs started a research program in 2017 within the Human Resources Operative Program national initiative that aims to improve the quality of active ageing in Hungary. During the project, we cover several scientific areas, focusing on the social, health and labour market situation of elderly people. The special aim of the project is to develop a methodology for measuring and developing jointly the physical and cognitive competences. This paper presents the first phase of the research. We draw attention to those strategies, social, policy and content factors that fundamentally affect the employability and employment opportunities of elderly people. In further sections, practical models of old-age employment and their implementation possibilities will be presented.

Extending Demographic Windows of Opportunity: Evidence from Asia

Abstract Population aging and a shrinking workforce creates a significant drag on opportunities for economic growth. Specifically, many economies in Asia will see their demographic windows of economic opportunity close within the next two decades or so. One widely explored policy response among governments has been to encourage longer working lives or delay retirement. This paper traces developments in retirement age policies for rapidly aging Asian economies, and investigates the effect of recent reforms in old-age employment practices on their demographic windows. We find that increases in retirement age based on current policy prescriptions can help these aging economies extend their demographic windows by another two to seven years. Nonetheless, further extensions to working lives are needed to help sustain economic expansion and to provide support for growing elderly populations. Our study also demonstrates that the extent of the time gains from retirement age increases vary depending on how the age structures in each economy is expected to evolve over time. Accordingly, the timing and quantum of future retirement age increases should be suitably calibrated so as to sufficiently offset declines in the working-age population.

Old-age employment and hours of work trends: empirical analysis for four European countries

For the last two decades, the increase of employment among individuals aged 50+ has been a policy objective on the European employment agenda. The present paper focuses on the case of Belgium, France, Germany, and The Netherlands over the period 1997–2011. First, we provide descriptive analysis of older workers’ employment using data from the European Union Labour Force Survey. Second, we use econometric techniques to explain the different employment and hours of work patterns for various sub-groups of older workers over time. We find evidence of catching up of older generation’s employment rates—with no rupture at the financial crisis in 2007. Third, we use micro-simulation techniques to decompose the effects of structural changes, as well as extensive and intensive labor supply changes. JEL Classification: J08, J21, J26

Labor Force Dynamics in the Great Recession and Its Aftermath: Implications for Older Workers

Unlike prime-age Americans, who have experienced declines in employment and labor force participation since the onset of the Great Recession, Americans past 60 have seen their employment and labor force participation rates increase. In order to understand the contrasting labor force developments among the old, on the one hand, and the prime-aged, on the other, this paper develops and analyzes a new data file containing information on monthly labor force changes of adults interviewed in the Current Population Survey (CPS). The paper documents notable differences among age groups with respect to the changes in labor force transition rates that have occurred over the past two decades. What is crucial for understanding the surprising strength of old-age labor force participation and employment are changes in labor force transition probabilities within and across age groups.The paper identifies several shifts that help account for the increase in old-age employment and labor force participation:- Like workers in all age groups, workers in older groups saw a surge in monthly transitions from employment to unemployment in the Great Recession.- Unlike workers in prime-age and younger groups, however, older workers also saw a sizeable decline in exits to nonparticipation during and after the recession. While the surge in exits from employment to unemployment tended to reduce the employment rates of all age groups, the drop in employment exits to nonparticipation among the aged tended to hold up labor force participation rates and employment rates among the elderly compared with the nonelderly. Among the elderly, but not the nonelderly, the exit rate from employment into nonparticipation fell more than the exit rate from employment into unemployment increased.- The Great Recession and slow recovery from that recession made it harder for the unemployed to transition into employment. Exit rates from unemployment into employment fell sharply in all age groups, old and young.- In contrast to unemployed workers in younger age groups, the unemployed in the oldest age groups also saw a drop in their exits to nonparticipation. Compared with the nonaged, this tended to help maintain the labor force participation rates of the old.- Flows from out-of-the-labor-force status into employment have declined for most age groups, but they have declined the least or have actually increased modestly among older nonparticipants. Some of the favorable trends seen in older age groups are likely to be explained, in part, by the substantial improvement in older Americans’ educational attainment. Better educated older people tend to have lower monthly flows from employment into unemployment and nonparticipation, and they have higher monthly flows from nonparticipant status into employment compared with less educated workers.The policy implications of the paper are:- A serious recession inflicts severe and immediate harm on workers and potential workers in all age groups, in the form of layoffs and depressed prospects for finding work.- Unlike younger age groups, however, workers in older groups have high rates of voluntary exit from employment and the workforce, even when labor markets are strong. Consequently, reduced rates of voluntary exit from employment and the labor force can have an outsize impact on their employment and participation rates.- The aged, as a whole, can therefore experience rising employment and participation rates even as a minority of aged workers suffer severe harm as a result of permanent job loss at an unexpectedly early age and exceptional difficulty finding a new job.- Between 2001 and 2015, the old-age employment and participation rates rose, apparently signaling that older workers did not suffer severe harm in the Great Recession.- Analysis of the gross flow data suggests, however, that the apparent improvements were the combined result of continued declines in age-specific voluntary exit rates, mostly from the ranks of the employed, and worsening reemployment rates among the unemployed. The older workers who suffered involuntary layoffs were more numerous than before the Great Recession, and they found it much harder to get reemployed than laid off workers in years before 2008. The turnover data show that it has proved much harder for these workers to recover from the loss of their late-career job loss.

Assessing the reassessment: A panel analysis of the Lisbon Strategy

We assess the employment impact of the Lisbon Strategy, examining long-run growth in total, female and old-age employment rates from 1994 to 2009. The Strategy had some impact, especially for old-age workers, but no improvement ensued from its mid-term reassessment.

Arbeiten bis ins hohe Alter: Institutionelle und nicht-institutionelle Einflüsse auf das Erwerbsverhalten älterer Menschen in Japan

AbstractCompared to most OECD-countries, Japanese old-age employment rates are high and a large portion of elderly Japanese participate in the labour market by means of deferred retirement. This paper examines institutional and non-institutional influences on employment behaviour, discussing motivators and barriers to the labour market integration of elderly people in Japan.On the macro-level of state-run regulation there are strong work incentives mediated by the national pension system as well as special employment promotion laws and instruments, whereas on the meso-level of collective and individual labour relations integrative human resource strategies play an important role (e.g. dismissal protection, personal transfers and special re-hiring schemes for regular workers at pensionable age). While some political and legal institutions must be criticized for their employment incentives and windfall gains, some may offer suggestive thought-provoking impulses for other ageing societies.Concerning the role...