OECD: International Perspective: Are senior citizens wanted on the LABOUR market?

1. INTERNATIONAL PERSPECTIVE:
ARE SENIOR CITIZENS WANTED ON
THE LABOUR MARKET?
Conference on active ageing in Denmark
SFI, Copenhagen, 21 October 2015
Anne Sonnet
Senior Economist
Directorate for Employment, Labour and Social Affairs,
OECD

2. 1. The labour market situation of older
workers in OECD countries
2. Key policy action
Outline of the presentation
2

3. THE OECD REVIEW ON AGEING AND EMPLOYMENT POLICIES
LIVE LONGER, WORK LONGER (2006)
WORKING BETTER WITH AGE (2016)

4. 1. THE LABOUR MARKET SITUATION
OF OLDER WORKERS
IN OECD COUNTRIES

5. Source: OECD estimates based on national labour force surveys.
Opportunities to work at an older age vary
considerably across OECD countries
5
Employment rates for people aged 55-59, 60-64 and 65-69, OECD countries, 2014
As a percentage of the age group
0
10
20
30
40
50
60
70
80
90
55-59 60-64 65-69 OECD 55-59 OECD 60-64 OECD 65-69

6. 6
The cross-country difference in employment
rates of older workers is driven more by job
retention than by job mobility
Retention and hiring rates by age group, selected countries, 2014a
Percentages
a) The retention rate is the ratio of all employees currently aged 60-64 with job tenure of five years or
more to all employees aged 55-59 five years previously. The hiring rate is the ratio of all employees
aged 55-64 with job tenure of less than one year to the total number of employees.
Source: OECD estimates based on national labour force surveys.
0
10
20
30
40
50
60
70
80
Retention rate Hiring rate

7. The older unemployed face a higher risk of
long-term unemployment than those aged 25-54
Incidence of long-term unemploymenta by age groups, OECD countries, 2014
As a percentage of unemployed by age
7
AUS
AUT
BEL
CAN
CZE
DNK
EST
FIN
FRA
DEU HUN
ISL
IRL
ISR
ITA
JPN
LUX
MEX
NLD
NZL
NOR
POL
PRT
SVK
SVN
ESP
SWE
TUR
GBR
USA
OECD
EU21
0
10
20
30
40
50
60
70
80
0 10 20 30 40 50 60 70 80

8. There is still a perception of age discrimination
in the labour market
Age discrimination in the workplace, European countries, 2011
Percentages
Source: Eurobarometer 2012.
0
5
10
15
20
25
30
35
40
45
Personally discriminated Have witnessed discrimination
8

9. There are significant differences across countries in
quality of life at work for older workers:
Finland leads the way
On a scale from 1 to 10, how would you rate your quality of life at work?
% scores 8-10, 2015
Source: EDENRED-IPSOS Barometer: 13 600 employees including 2 000 employees aged 55 and over
surveyed in January 2015 in 14 countries. Data are not available for Turkey.
9
0
10
20
30
40
50
60
70
55 and over National average

10. Older workers reporting supervisors are
concerned about their well-being ranges
from 39% in France to 67% in the UK
Would you say that your line manager genuinely cares about employee well-being?
% strongly agree and agree
Source: EDENRED-IPSOS Barometer: 13 600 employees including 2 000 employees aged 55 and over
surveyed in January 2015 in 14 countries. Data are not available for Turkey.
10
0
10
20
30
40
50
60
70
80
55 and over National average

11. The seniority element in wages is more
pronounced in some countries
Age-wage profilea in selected countries, 2012
Hourly wage at 25-29 = 100
a) The figures show the relationship between age and hourly wages, controlling for gender,
immigration status of parents, industry, occupation, permanence of the contract, part-time work, years
of job tenure, years of education and two different measures of skills.
Source: OECD estimates based on PIAAC data. 11
90
95
100
105
110
115
120
125
130
135
140
25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64
DNK OECD FRA DEU

12. Participation in job-related training by older
workers is lower than for workers aged 25-54
Job-related traininga by age group, selected countriesb, 2012
As a percentage of the employed in each age group
a) Job-related training refers to participation during the past twelve months.
b) OECD refers to the unweighted average of the 22 OECD countries having participated in PIAAC. UK
refers to England and Northern Ireland; Belgium refers to Flanders.
Source: OECD estimates, based on PIAAC data.
0
10
20
30
40
50
60
70
55-64 25-54
12

13. The literacy skills of older people are low relative
to the younger generation, except in the UK
Only England and Northern Ireland for the UK and only Flanders for Belgium.
Source: OECD Adult Skills Survey (PIAAC).
Progress in literacy skills across two generations, 2012
Score on the reading scale
220
230
240
250
260
270
280
290
300
220
230
240
250
260
270
280
290
300
16-24 55-65 Average 16-24 Average 55-65

14. The computer skills of older people are low
relative to the younger generation,
except in the Nordic countries
Only England and Northern Ireland for the UK and only Flanders for Belgium.
Source: OECD Adult Skills Survey (PIAAC).
30
40
50
60
70
80
90
100
30
40
50
60
70
80
90
100
16-24 55-65 Average 16-24 Average 55-65
Progress in the use of computers across two generations, 2012
Prior computer experience and passed the ICT core test (% of persons)

15. 2. KEY POLICY ACTION

16. OECD’s policy agenda to
promote longer working lives
Address age discrimination,
mandatory retirement,
mechanisms linking pay and
working conditions to age or
length of service
Take a balanced approach to
employment protection
Good practice in managing an
age-diverse workforce
GOVERNMENT
EMPLOYERS
UNIONS
CIVIL SOCIETY
1. Rewarding work and later retirement
2. Encouraging employers to
retain and hire older workers
Pension reform
Flexibility in work-retirement decisions
No publicly-funded early retirement
schemes
No welfare benefits towards early
retirement
Enhance participation in
training by workers
Provide effective employment
assistance to jobseekers
Improve working conditions
through a broad-based
strategy to improve job
quality for workers
at all ages
3. Sustaining employability
throughout working lives
16

17. 1. Strengthen incentives for workers to build
up longer careers and to continue working
at an older age
2. Encourage employers to retain and hire
older workers
3. Promote the employability of workers
throughout their working lives with a view
to strengthen employment opportunities at
an older age
17
Heavy policy focus on the first area
relative to the second and third areas

18. Policy action in the second (employers’ barriers) and third (employability)
areas has been much less frequent and sometimes only at the margin
Source: Sonnet, Olsen and Manfredi (2014), “Towards More Inclusive Ageing and Employment Policies: The Lessons
from France, The Netherlands, Norway and Switzerland “, De Economist, Vol. 162, Issue 4.
The top priority in the countries reviewed so far has
been to “Strengthen financial incentives
to carry on working”

19. Encourage employers to retain and hire older workers
Progress and what still needs to be done
• Address age discrimination in employment -- banned by law in
many countries (except in Switzerland). Even if many countries have
launched a number of ad hoc initiatives, more could be done to
change negative attitudes of employers to hire older workers.
 The Netherlands has launched very concrete measures towards age
discrimination, such as the screening of vacancy announcements.
 In France, the PES (Pôle emploi) has developed the “simulation”
recruitment method enabling new hires to be selected through aptitude
tests without regard to age or previously held jobs.
• Seek to discourage or further restrict mandatory retirement, still
in place informally and in some collective labour agreements. More
could be done to reach all sectors.
 In Denmark, the mandatory retirement age of 70 for civil servants was
abolished in 2008 but mandatory retirement ages are still in place in the
private sector.
19

20. Encourage employers to retain and hire older workers
Progress and what still needs to be done (cont.)
• Encourage the social partners to identify mechanisms to
facilitate the retention and hiring of all older workers, including
reviewing their practices in setting pay to reflect productivity
and experience, not age. More could be done. The social partners have
not reviewed extensively pay practices based on age or length of service.
Public authorities could give an example by introducing performance pay and
limiting automatic rises in salary with tenure for public-sector employees.
• Take a balanced approach to employment protection. Countries
tend to adopt age-neutral measures on employment protection.
 One exception is Poland where workers with less than four years
until retirement are protected from layoffs.
• Provide employers with guidance on good practice in managing
an age-diverse workforce. More could be done.
 The Centre for Senior Policy in Norway aims to raise awareness on
older workers among all parties.
20

21. Promote the employability of workers
throughout their working lives
Progress and what still needs to be done
• Enhance participation in training by ensuring that it is adjusted
to reflect the experience and learning needs of older workers.
More could be done to make training more attractive to low-skilled workers
and encourage enterprises to keep training them until retirement.
 In the Netherlands and Switzerland, the use of the instrument to
validate skills acquired on the job is increasing.
 In Poland, a National Training Fund was established in 2014 with a
short-term priority to reach workers over the age of 45.
• Provide effective employment assistance to jobseekers,
irrespective if their age, but targeted at those groups most at
risk of long-term joblessness.
 In Switzerland, high activation of older unemployed by the PES to
help them back to work based on early intervention, intensified
coaching and individual targeting.
 In Denmark, the Senior Network is an innovative practice receiving
financing from the public budget to promote participation in teams to
find jobs.
21

22. Promote the employability of workers throughout their
working lives
Progress and what still needs to be done (cont.)
• Improve working conditions through a broad-based strategy to improve
job quality for workers of all ages. Countries aim to reduce the effects of
poor working conditions in a preventative way but more could be done to
reach more firms:
 In Norway, anticipating and reducing sickness-related absenteeism
more effectively is one of the three goals of the “Inclusive Workplace
Agreement” introduced in 2001 and by 2012 covering 60% of workers.
 The networking initiative developed in the Netherlands among volunteer
“pioneer” firms aims to promote sustainable employability and better
health for their workers.
 In France, as a headline measure of the 2013 pension reform, the
personal account for preventing strenuous work exposure came partly
into force in January 2015 for private-sector workers.
 In Denmark, “prevention self-help kits” , including a specific “senior
starter kit”, offer subsidies to enterprises to improve health and safety
conditions.
22

23.  Many OECD countries have carried out a series of
(pension) reforms to encourage longer working lives.
 Promoting the employability of workers throughout their
working lives remains crucial.
 Governments, workers, the social partners and NGOs have
to face these challenges together.
 A more comprehensive set of reforms is necessary to
improve current practices in firms to upskill, retain and
hire older workers in a technology-rich work environment.
 More should be done to ensure that senior citizens are
wanted on the labour market.
23
Conclusion: More should be done !

24. For further information:
Anne Sonnet (anne.sonnet@oecd.org)
the review Working Better with Age
www.oecd.org/els/employment/olderworkers
Thank you!