Improvements for older workers on the labour market: not merely induced by the business cycle

Abstract

"The employment situation of older workers in Germany is not at all satisfactory, as older workers still represent a problematic group within the labour market. Nevertheless labour market indicators show that the unemployment rates of older workers have gone down and employment rates have gone up in recent years. Is this improvement mainly due to the economic upswing between 2005 and 2008? Or have institutional issues - such as pension or labour market reforms - played a leading part?<br> Using administrative data from the Federal Employment Agency, the paper compares the unemployment and employment rates of older workers and younger age groups over time. The reference period is the decade between 1998 and 2008.<br> It appears that the trend towards a better labour market performance of older workers already started long before the beginning of the last economic upswing. Pension and labour market reforms initiated an institutional turnaround and are likely to have fostered the said improvement during recent years. These reforms can be interpreted as a clear signal for all parties involved that a longer working life is now to be expected. In particular, workers aged between 55 and 59 years are taking advantage of the improvement. By contrast, almost no significant progress with respect to the employment situation of workers in the age group '60 to 64 years' was identified. In general, employment rates of older workers depend to a large extent on skill levels: for instance, older graduates do not have a much lower employment rate than younger graduates.<br> The results make it clear that the reforms of the previous years should not be reversed, a fact that also holds true with respect to the present financial crisis. On the contrary, it would appear appropriate to put stronger emphasis on the issue of employability. A preventive approach regarding life-long learning and life-long health protection would seem to be the most favourable policy for individuals aiming at a long-lasting working life and a secure retirement income." (Author's abstract, IAB-Doku) ((en))

Cite article

Arlt, A., Dietz, M. & Walwei, U. (2009): Besserung für Ältere am Arbeitsmarkt: Nicht alles ist Konjunktur. (IAB-Kurzbericht 16/2009), Nürnberg, 8 p.