National policies towards older workers: Germany in comparison with other countries

Cornelia Spross

Gernan Federal Ministry of Labour and Social Affairs

cornelia.spross@bmas.bund.de

Overview

1. Current labour market situation of older workers – a brief introduction

2. Policies towards older people in Germany: Labour market measures vs. pensions reforms

3. Same problems, different ways: reforms and measures in other countries

4. Summary

1. Current labour market situation Changed labour market situation of older workers

• Increase employment rates/ exit age and decrease unemployment

Changed labour market orientation towards older workers • Implementation of policies for promoting/ prolonging

employment and combating unemployment

• Also: Importance of “European background” (Lisbon-Strategy; EU-2020)

Process observable all welfare states with differences in timing and reform process (Hofäcker et al. 2006; Maltby et al. 2004)

20

30

40

50

60

70

80

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

EU27 DK DEU FRA ITA NLD AUT SWE GB

Employment rate 55-64 years, 1999-2009

Source: Eurostat

1. Current labour market situation

0

2

4

6

8

10

12

14

16

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

EU27 DK DEU FRA ITA NLD AUT SWE GB

Source: Eurostat, unemployment rate aftter ILO-criteria

1. Current labour market situation Unemployment rate 55-64 years, 1999-2009

55

57

59

61

63

65

FRA AT ITA EU-15 D NL FIN DK UK SW

2001 2008

Source: Eurostat

1. Current labour market situation Average exit age, 2001 and 2008

1. Current labour market situation Most progress: Scandinavian countries, also liberal

countries • Rather low use of early retirement• Lower pressure for reforms

Different picture in conservative countries as welfare states “without work” (Esping-Andersen 1996) • Strong peculiarity of early retirement• High pressure for reforms, but difficulties due to deeply

rooted (acquired) attitudes (Ebbinghaus 2006; Ferichs 2007)

Which differences in reform paths can be detected among GER, UK and DNK?

2. Policies towards older people in GermanySpecial characteristics:

Ageing of society as long-term challenge Improvement of employment situation for older people

(esp. 55-59) over past 15 years But: Unemployment problem / Risk of long-term

unemployment Previously high use of early retirement measures Start reform process by end 1980s, but with rearward

movements in 1990s Stricter reforms since beginning 2000

Main pension reforms: Pension reform (1992): Increase of age limits

(Altersgrenzen) Rentennachhaltigkeitsgesetz (2004) Pension reform (2007): Stepwise increase of pension

age from 65 to 67 (starting 2012) Gesetz zur Förderung der betrieblichen Altersvorsorge

(2007)

Main focus on a) securing the financial stability of the pension insurance and b) on improving the access to private insurances

2. Policies towards older people in Germany

Main labour market reforms:

Job-Aqtiv Law (2002) and Hartz-Reforms (2003) Decreasing the maximum duration for receiving unemployment

benefits for older people (2004 / 2006) (changed again: 2008) Gesetz zur Verbesserung der Beschäftigungschancen älterer

Menschen (2007): Improvement of employment opportunities for older workers

Initiative 50plus (2006): Focus in reintegration of older (long-term) unemployed and introduction of several instruments

Perspektive 50plus (2005): Regional promoted projects

Limited success in terms of activation and placement efforts in favour of older (unemployed) persons

2. Policies towards older people in Germany

3. Reforms in other countries

Great Britain: Stable labour market situation, but: problem of inactivity

(high use of disability benefit) Pension reforms: Increase pension age for women (60 to

65 years); Reform of state and private system (2007); Workplace pension reform (2010)

Labour market reforms: New Deal 50+ (1997), Welfare reforms (1999, 2007)

Early labour market orientation towards older people, but late focus on pension

3. Reforms in other countries

Denmark: Traditional high employment; Flexicurity Pension reforms: Reductions/ abolishment early retirement

instruments/ Efterlon (1996, 1999, 2002) and disability benefit (2003)

Number of labour market reforms since 1993, but without particular focus on older persons

Early labour market orientation towards older people with focus on activation (training, qualification); also focus on pension issues; interesting: retirement age

4. Summary

All countries:

Various reforms against the demographic background and under „European influence“

Various reforms to improve employment situation/ to reintegrate unemployed persons trend towards higher employment levels

Tight connections between labour market and pensions policies, but different foci

4. Fazit

Differences among the countries maybe due to:

Labour market situation • A relieved labour market situation abetted the policy

reversal, since it increased the scope of the political actors and the relevance of reforms.

Policy-institutional factors• Restrictive reforms were more possible in modernised/

liberalised governments with consensual negation patterns.

cornelia.spross@bmas.bund.de