Labour market participation of ageing workers. Micro-financial incentives and policy considerations (original) (raw)
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To understand how to raise labor force participation of older workers, it is necessary to understand demand, supply, and institutional factors. Labor supply and retirement decisions of older workers are at the core of microeconomic research and many countries have recently reformed their pension systems to make early retirement financially less attractive. Noneconomic factors like quality of work, health status, social networks, and peer group behavior are important as well. The demand side of the labor market is equally important, particularly now that recent pension reforms have raised labor supply. Key questions are: How to maintain the productivity of older workers? How to eliminate existing prejudice toward older workers among employers and coworkers? How effective are laws against age discrimination or public campaigns to promote the image of older workers? Which demand side adjustments will be necessary to accommodate an increased supply of older workers, concerning, e.g., hiring policies, reducing wage costs, training of older workers, using alternative exit routes, accommodating workers with a health problem and facilitating gradual retirement? In this article, we discuss the labor force participation of older age groups. We discuss definition and measurement of old age and work participation and present some data on OECD countries, provide an overview of the determinants of retirement and labor supply of older age groups, and summarize what we know about labor demand and productivity. We also discuss policy issues that may guide future research.
Labor Force Participation of Older Workers. Background Paper No. 20
1989
The recent decline in the labor force participation rates of older Americans is well known and well documented. Dramatic changes in male participation rates occurred between 1968 and 1986. Declines were substantial as early as age 55 and as late as age 70. The trends for older women were much less dramatic. In 1988, nearly half of employed men and more than half of employed women aged 65 and over were working part time, voluntarily, compared to about 6 percent of men and 23 percent of women less than 65. Older workers were more likely to be self-employed than were members of any other age group. Determinants of the retirement decision included economic incentives, health, and labor market obstacles. Mandatory retirement has virtually been eliminated. Social security amendments will delay the age of eligibility for full retirement benefits to 67. These changes should work to increase the labor force participation of older workers, although recent research suggested that the impact will be modest. Little is known about how employer pension plans will change in response to social security rule changes. Surveys suggested that many older workers would like to retire gradually, although currently only a minority do. Policies that facilitate gradual retirement by making it less costly for firms to hire part-time workers and less costly for older workers to accept part-time employment should be considered. (A 73-it,A1 refere ice list is included in the document.) (CML)
Labour Market Participation of the Elderly
The Pakistan Development Review
Generally ageing of population is defined as the relative increase in the number of elderly. This process is the result of declining fertility and increasing life expectancy of elderly population. In today’s Pakistan, fertility has started declining and life expectancy of elderlies has been increasing and it is expected that in future both these processes will gain momentum, resulting into many fold increase in the population of elderly people [Afzal (1999); Sathar and Casterline (1998)]. These developments are expected to have adverse effects on Pakistan’s economy as support and welfare of elderly people will require additional allocation of resources. That is more so because traditionally welfare and socio-economic needs of elderly people remained the responsibility of their children especially the sons. However, the traditional extended/joint family system is fast breaking down and nuclear type of family set up is becoming more common rendering the elderly people helpless [Ali (2...
A Micro-level Analysis of Recent Increases in Labor Force Participation among Older Workers
2006
Aggregate data reveal a sizable increase in labor force participation rates since 2000 among workers on the cusp of retirement, reverting back to levels for older men not seen since the 1970s. These aggregate numbers are useful in that they document overall trends, but they lack the ability to identify the reasons behind workers' decisions. The Health and Retirement Study (HRS) spans the last dozen years from 1992 to 2004, includes two cohorts of retirees, and provides micro-level data regarding these recent trends. Moreover, the HRS contains information on older Americans and the types of jobs they are taking (full-time versus part-time, self-employed versus wage-and-salary, low-paying versus high-paying, blue collar versus white collar, etc.). This study capitalizes on the richness of the HRS data and explores labor force determinants and outcomes of older Americans, with an emphasis on retirees' choices in recent years. We present a cross-sectional and longitudinal description of the financial, health, and employment situation of older Americans. We then explore retirement determinants using a multinomial approach to model gradual retirement and a two-step approach to model the work-leisure and hours intensity decisions of older workers. Evidence suggests that the majority of older Americans retire gradually, in stages, and that younger retirees continue to respond to financial incentives just as their predecessors did. In addition, recent macro-level changes appear to have blurred the distinction between younger and middle-aged retirees.
Retirement Incentives - the Carrot and the Stick: (Why No One Works Beyond 65 Anymore)
The Economics of Aging, 1985
was made possible by the contributions of many individuals and institutions. We are extremely pleased to have the W. E. Upjohn Institute for Employ ment Research and the College of Health and Human Services and the College of Arts and Sciences as co-sponsors of the series. In addition, the series benefitted significantly from the contribution of the Seminar Com mittee composed of Professors Phillip Caruso, Sisay Asefa and Michael Payne of the Department of Economics. Finally, we owe thanks to Ms. Becky Ryder and Bonnie Kuminski of the secretarial staff of the Depart ment of Economics for keeping the seminar on track.