WORKING BETTER WITH AGE

REPORT ON OLDER WORKERS IN DENMARK

Copenhagen, 21 October 2015

Mark Keese, Head of Division

Anne Sonnet, Project Leader

Directorate for Employment, Labour and Social Affairs, OECD

1. Working Better with Age: the OECD

review

2. Major challenges in Denmark

3. Key recommendations

Outline of the presentation

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WORKING BETTER WITH AGE

THE OECD REVIEW

2003-2006 review on older workers

21 country reports (including Denmark in 2005):

Ageing and Employment Policies

And a synthesis report (2006): Live Longer,

Work Longer

Agenda for policy actions in three broad

areas to encourage work at an older age:

1. Rewarding work

2. Changing employer practices

3. Improving employability

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• Comparative policy review of recent reforms and

measures and a scoreboard for older workers:www.oecd.org/els/employment/olderworkers

• Seven country case studies: Norway (June 2013),

France (January 2014), Netherlands (April 2014),

Switzerland (October 2014), Poland (March 2015),

Denmark (October 2015) and Korea (2016)

• Recommendation on Ageing and Employment Policies to

promote longer working lives to be presented at the

OECD Labour Ministerial meeting in January 2016

• Synthesis report Working Better with Age (2016)

A follow-up review launched in 2011 to assess progress and what still needs to be done

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In response to the OECD recommendations in 2005,

Denmark implemented several substantial policy

initiatives to encourage work at an older age.

The aims of this report are to:

Assess these policy initiatives and their impact on the

employment situation of older workers.

Identify specific areas for further action, covering

both supply- and demand-side aspects.

Ageing and employment policies: Denmark

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MAJOR CHALLENGES IN DENMARK

The employment rate of people aged 55-64 is above

the OECD average for both men and women, but well

below the best achievers

Employment rates (55-64), OECD countries, 2014

As a percentage of the population aged 55-64

Source: OECD Labour Force Statistics database.

8

0

10

20

30

40

50

60

70

80

90

100

Men Women

Employment in the age group 55-59 was

hit by the crisis

Percentage points change in employment rates (55-59), OECD countries, 2007-2014

Source: OECD Labour Force Statistics database.

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-15

-10

-5

0

5

10

15

20

25

But employment in the age group 60-64

increased between 2007 and 2014,

following (early) pension reforms

Percentage points change in employment rates (60-64), OECD countries, 2007-2014

Source: OECD Labour Force Statistics database.

10

-10

-5

0

5

10

15

20

25

However, working after the age of 65 remains

uncommon

Employment rates of population aged 65-69, selected countries, 2002-2014

As percentage of the population aged 65-69

Source: OECD Labour Force Statistics database.

11

0

5

10

15

20

25

30

35

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

DNK USA OECD EU21 SWE

Denmark is among the hiring champions, but with

a big gap between prime-aged and older workers

Hiring rates by age group, selected countries, 2014a

Percentages

a) 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 the European Union Labour Force Survey (EU-LFS).12

0

5

10

15

20

25

55-64 25-54

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

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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

14

AUS

AUT

BEL

CAN

CZE

DNK

EST

FIN

FRADEU HUN

ISL

IRL

ISR

ITA

JPN

LUX

MEX

NLD

NZL

NOR

POL

PRTSVK

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

The seniority element in wages is more

pronounced than on average in the OECD area

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. 15

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

KEY RECOMMENDATIONS

• Enhance work incentives for people

approaching the retirement age and even

beyond

• Provide more information to help people

make well-informed choices between work

and retirement

• Ensure that transitory “bridging” benefits are

not used as alternative pathways to early exit

from the labour market

Make work more rewarding

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• Ensure greater age-neutrality in the

functioning of the labour market

– Getting the balance right between job security for

older workers and a flexible labour market could

prove to be more challenging with the postponement

of statutory retirement.

– Prevent older job applicants from being discriminated

against based solely on the fact that they are close to

the retirement age.

Encourage employers to hire

and retain older workers

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• Move ahead with abolishing mandatory retirement age in the public and private sectors– This is especially crucial in those sectors and occupations

facing labour shortages, such as the health and care sector and the trade sector.

• Focus wage-setting procedures more on performance and skills and less on age and tenure, particularly in the public sector

• Evaluate which measures work best to promote longer working lives and create networks for sharing experience among employers

Encourage employers to hire

and retain older workers (cont.)

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• Improve access to suitably flexible work

arrangements

– Encourage social dialogue to better integrate

working-hour arrangements, organisation of work

tasks, technologies and personnel management

• More work-focused continuous learning

– Training courses should have a short or flexible

payback period

– Give VET teachers incentives to regularly spend time

in a firm within their professional field

Strengthen the employability of

older workers

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• Co-ordination between health care and employment services could be improved to increase the likelihood of return to work

– The potential of the “Senior starter kit” should be evaluated

• Encourage transitions back to regular jobs and prevent inactive periods and early exit from the labour market

– Phase out seniorjobs or at least reform them to give stronger incentives to return to regular jobs

– Provide regular assessment of employability for flexjobs

Strengthen the employability of

older workers (cont.)

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Thank you!

For further information:

Mark Keese mark.keese@oecd.org

Anne Sonnet anne.sonnet@oecd.org

http://www.oecd.org/els/employment/olderworkers

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