The paper reviews international experience with selected measures aimed at increasing employment of older workers and identifies best practices. Among the measures addressing worker obstacles, the paper focuses on the promotion of training, on adjusting employment services and active labour market programs for older workers, and on promoting better working conditions; among the areas addressing employer obstacles, it focuses on adjusting employment protection rules for older workers, on subsidizing wages of older workers, and on challenging employers’ negative perceptions. In addition, to offer a perspective into more holistic approaches that countries have applied, the report provides three case studies of targeted programs on older workers in United Kingdom, Germany, and Canada.
This is a preview of subscription content, log in to check access.
Buy single article
Instant access to the full article PDF.
Price includes VAT for USA
Subscribe to journal
Immediate online access to all issues from 2019. Subscription will auto renew annually.
This is the net price. Taxes to be calculated in checkout.
Responding to the challenge of rapid population aging requires comprehensive reforms that include, beside measures focused upon in this paper, also accompanying actions in the areas of old-age insurance and welfare policies. Discussing these policies, however, is beyond the scope of the paper.
The earliest training levy/grant programs in Belgium, Cyprus, Denmark, France and the Netherlands began as narrowly focused sectoral training programs in the 1960s and 1970s. See CEDEFOP (2008) for a summary of European training fund programs.
Labour market programs may have some unintended effects that reduce their effectiveness. For training programs, for example, the substitution effect refers to a situation when jobs created for a certain group of workers replace jobs for other groups because their costs to employers have changed. Similarly,the deadweight effect occurs when program outcomes are not different from what would have happened in the absence of the program – for example, a worker being trained under the program that would have been trained anyway (also in the absence of the training).
According to Johanson (2009), there are 17 programs in Central, Latin America and Caribbean, 17 in Sub-Saharan Africa, 14 in Europe, 7 in Middle East and North Africa, and 7 in Asia and Pacific.
The countries included are Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Portugal, Spain, and United Kingdom.
For details, see https://www.gov.uk/government/collections/age-positive
Into-work benefits are temporary or one-off bonus payments received by persons moving into employment. In contrast, in-work benefits – that can take the form of tax credits or reduced income taxes and social security contributions – increase the income of workers with low earnings capacity on a permanent basis. Both into-work and in-work benefit schemes are widely used internationally (see Immervoll and Pearson 2009).
Albanese, A., & Cockx, B. (2015). Permanent wage cost subsidies for older workers an effective tool for increasing working time and postponing early retirement? (discussion paper). Louvain. Retrieved from http://sites.uclouvain.be/econ/DP/IRES/2015006.pdf. Accessed 10 Dec 2018.
Behaghel, L., Crépon, B., & Sédillot, B. (2008). The perverse effects of partial employment protection reform: The case of French older workers. Journal of Public Economics, 92(3), 696–721. https://doi.org/10.1016/j.jpubeco.2007.12.004.
Boockmann, B. (2015). The effects of wage subsidies for older workers. IZA World of Labor. https://doi.org/10.15185/izawol.189.
Boockmann, B., & Brändle, T. (2015). Coaching, Counseling, Case-Working: Do They Help the Older Unemployed Out of Benefit Receipt and Back into the Labor Market? IZA discuassion paper No. 8811.
Boockmann, B., Zwick, T., Ammermüller, A., & Maier, M. (2012). Do hiring subsidies reduce unemployment among older workers? Evidence from natural experiments. Journal of the European Economic Association, 10(4), 735–764. https://doi.org/10.1111/j.1542-4774.2012.01070.x.
Cardoso, A. R., Guimarães, P., & Varejão, J. (2011). Are older workers worthy of their pay? An empirical investigation of age-productivity and age-wage nexuses. De Economist, 159, 95–111.
CEDEFOP (2008). Sectoral training funds in Europe. European Centre for the development of Vocational Training. Panorama series No. 156. Luxembourg.
CEDEFOP (2009a). Using tax incentives to promote education and training. European Centre for the development of vocational training. Thessaloniki. Retrieved from https://www.cedefop.europa.eu/files/5180_en.pdf. Accessed 10 Dec 2018.
CEDEFOP (2009b). Individual learning accounts. European Centre for the development of Vocational Training. Panorama series No. 163. Luxembourg. Retrieved from http://www.cedefop.europa.eu/en/publications-and-resources/publications/5192. Accessed 10 Dec 2018.
Dar, A., Canagarajah, S., & Murphy, P. (2003). Training levies: Rationale and evidence from evaluations. Washington, DC: World Bank Retrieved from http://siteresources.worldbank.org/INTLM/Resources/TrainingLevies.pdf. Accessed 10 Dec 2018.
Department for Business Innovation and Skills. (2011). “Employment and Earning Outcomes from Train to Gain Extension Analysis”, BIS Research Paper Number 48, June 2011. Available at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/32296/11-1036-employment-earning-outcomes-train-to-gain-extension.pdf. Accessed 10 Dec 2018.
Fouarge, D., & Schils, T. (2009). The effect of early retirement incentives on the training participation of older workers. LABOUR, 23(s1), 85–109. https://doi.org/10.1111/j.1467-9914.2008.00441.x.
Görlitz, K., & Tamm, M. (2016). The returns to voucher-financed training on wages, employment and job tasks. Economics of Education Review, 52, 51–62. https://doi.org/10.1016/j.econedurev.2016.01.004.
Graham, C. (2014). Late-life work and well-being. IZA World of Labor. https://doi.org/10.15185/izawol.107.
Hidalgo, D., Oosterbeek, H., & Webbink, D. (2014). The impact of training vouchers on low-skilled workers. Labour Economics, 31, 117–128. https://doi.org/10.1016/j.labeco.2014.09.002.
Huttunen, K., Pirttilä, J., & Uusitalo, R. (2013). The employment effects of low-wage subsidies. Journal of Public Economics, 97, 49–60. https://doi.org/10.1016/j.jpubeco.2012.09.007.
Immervoll, H. & Pearson, M. 2009. A Good Time for Making Work Pay? Taking Stock of In-Wok Benefits and Related Measures across the OECD. IZA Policy Paper No. 3.
Johanson, R. (2009). A review of national training funds. Social protection discussion paper; no. SP 0922. Washington, DC: World Bank Retrieved from http://siteresources.worldbank.org/SOCIALPROTECTION/Resources/SP-Discussion-papers/Labor-Market-DP/0922.pdf. Accessed 10 Dec 2018.
Kamphuis, P., Glebbeek, A. C., & Van Lieshout, H. (2010). Do sectoral training funds stimulate training? International Journal of Training and Development, 14(4), 273–290.
Kluve, J. (2017). ALMP for older workers. Invited presentation at the 29th EALE conference 2017, 21–23 September (p. 2017). Switzerland: St. Gallen.
Knuth, M. (2014). Broken hierarchies, quasi-markets and supported networks - a governance experiment in the second tier of Germany’s public employment service. Social Policy & Administration, 48(2), 240–261. https://doi.org/10.1111/spol.12059.
Kuku, O., Orazem, P. F., Rojid, S., & Vodopivec, M. (2016). Training funds and the incidence of training: The case of Mauritius. Education Economics, 24(3), 280–299. https://doi.org/10.1080/09645292.2015.1009418.
Leuven, E., & Oosterbeek, H. (2004). Evaluating the effect of tax deductions on training. Journal of Labor Economics, 22(2), 461–488. https://doi.org/10.1086/381257.
Montizaan, R., Cörvers, F., & De Grip, A. (2010). The effects of pension rights and retirement age on training participation: Evidence from a natural experiment. Labour Economics, 17(1), 240–247. https://doi.org/10.1016/j.labeco.2009.10.004.
Müller, N., & Behringer, F. (2012). Subsidies and levies as policy instruments to encourage employer-provided training. OECD Education Working Paper No. 80. Retrieved from http://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?cote=EDU/WKP(2012)17&docLanguage=En. Accessed 10 Dec 2018.
NAO. (2007). Helping people from workless households into work. In National Audit Office report , retrieved from https://www.nao.org.uk/wp-content/uploads/2007/07/0607609.pdf. Accessed 10 Dec 2018.
OECD. (2004). Co-financing lifelong learning : Towards a systemic approach. Paris: OECD Publishing Retrieved from http://www.oecdbookshop.org/en/browse/title-detail/?ISB=9789264018129.
OECD. (2006). Live longer, work longer. Paris: OECD Publishing Retrieved from http://www.oecdbookshop.org/browse.asp?pid=title-detail&lang=EN&ds=&k=5LGJSMZXCGQ4.
Perez-Johnson, I., Moore, Q., & Santillano, R. (2011). Improving the effectiveness of individual training accounts: Long-term findings from an experimental evaluation of three service delivery models. In Mathematica policy research Retrieved from https://wdr.doleta.gov/research/FullText_Documents/ETAOP_2012_06.pdf.
Picchio, M. (2015). Is training effective for older workers? IZA World of Labor. 10.15185/izawol.121.
Picchio, M., & van Ours, J. C. (2013). Retaining through training even for older workers. Economics of Education Review, 32, 29–48.
Renkema, A. (2006). Individual learning accounts: A strategy for lifelong learning? Journal of Workplace Learning, 18(6), 384–394. https://doi.org/10.1108/13665620610682107.
Schuetze, H. G. (2007). Individual learning accounts and other models of financing lifelong learning. International Journal of Lifelong Education, 26(1), 5–23. https://doi.org/10.1080/02601370601151349.
Singer, C., & Toomet, O.-S. (2013). On government-subsidized training programs for older workers. IAB - Discussion Paper, No. 21/2013. Retrieved from https://www.econstor.eu/bitstream/10419/103060/1/775927384.pdf. Accessed 10 Dec 2018.
Širok, K. (2011). Dejavniki in poti upokojevanja v Sloveniji: možnosti podaljševanja delovne aktivnosti. Fakulteta za management, Koper. Retrieved from http://www.fm-kp.si/zalozba/ISBN/978-961-266-109-0.pdf. Accessed 10 Dec 2018.
Sonnet, A., Olsen, H., & Manfredi, T. (2014). Towards more inclusive ageing and employment policies: The lessons from France, the Netherlands. Norway and Switzerland. De Economist, 162, 315–339 Retrieved from http://www.oecd.org/els/emp/Towards-More-Inclusive-Ageing-and-Employment-Policies.pdf. Accessed 10 Dec 2018.
van Ours, J. C., & Stoeldraijer, L. (2011). Age, wage and productivity in Dutch manufacturing. De Economist, 159, 113–137.
Vandenberghe, V. (2011). Introduction to De ECONOMIST special issue on “ageing workforces”. De Economist, 159, 89–94.
Vodopivec, M. (2014). Equal pay for equal work? Wage and productivity differentials during Slovenia’s transition. Eastern European Economics, 52(5), 87–110.
Vodopivec, M., Laporšek, S., & Vodopivec, M. (2016). Levelling the Playing Field: The Effects of Slovenia’s 2013 Labour Market Reform. IZA Discussion Paper No. 9783.
This paper is part of a larger project that received financial support from the European Union Programme for Employment and Social Innovation “EaSI” (2014-2020).
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
About this article
Cite this article
Vodopivec, M., Finn, D., Laporšek, S. et al. Increasing Employment of Older Workers: Addressing Labour Market Obstacles. Population Ageing 12, 273–298 (2019). https://doi.org/10.1007/s12062-018-9236-4
- Older workers
- Employment protection legislation
- Labour policy