Restructuring during recession: what happened to age management policies?
The policy importance of this issue is clear. The old-age dependency ratio is rising across Europe. In 2040, those over the age of 65 will represent more than 45% of the working age population aged 15-64 in the EU-27 (compared to 26% in 2010). Population ageing will require more individuals across Europe to work to an older age to satisfy the demand for labour and to relieve pressure on social security and pension systems.
In previous recessions there had been a strong association between restructuring and early retirement and many older workers exited the workforce permanently. Was this pattern repeated during the 2008-9 recession?
- Previous incentives for early retirement have been reduced, dropped or reworked to encourage gradual or phased retirement or, more generally, working time flexibility for older workers
- Nonetheless, the case studies demonstrate that there was significant recourse to early retirement where recessionary pressures forced job cuts on employers
- The workforce age profile grew sharply during the recession. In all member states, employment rates of older workers tended to be less affected by the recession than that of core age and younger workers
- Retirement ages are being increased in many member states. Others have dropped the statutory retirement age. Incentives are increasingly geared to extending working lives (eg. bonuses for deferred pensions) and to penalising early withdrawal.
Company case studies (2 per country) were carried out in nine Member States during 2011: Austria, Belgium, the Czech Republic, Hungary, Latvia, the Netherlands, Spain, Sweden, and the United Kingdom. The findings of these case studies were then set in context with national policy overviews which covered legislative developments and social partner initiatives prior to and during the 2008-9 recession.
This project is complementary to the earlier Eurofound project on Employment initiatives for an ageing workforce and its database of good practice examples.