Policy-making in Ageing Labour Markets: The Case of Hidden Early Retirement in Germany

Compared with other European societies, the institutional arrangements and incentives in Germany against early retirement have been reformed faster and more comprehensively during the last decade. However, two pathways survived leading to an early exit from the labour market.¹ For employed persons, there is the opportunity of ‘part-time work for older employees’ (Altersteil.eit), which is a form of bridge employment: Although not restricted to a specific way to phase out the work life, in most cases people split the total period of ‘part-time work’ into a first part of full work and reduced income, followed by a second part without work at all, but still receiving income and paying pension contributions. For unemployed persons, there is the opportunity of getting unemployment benefits (UB) without the obligation to search a job and quit unemployment as soon as possible (Leistungsbezug unter erleichterten Voraussetzungen – receipt of benefits under facilitated conditions, according to § 428 SGB III / German Social Code III), which can be seen as a kind of ‘bridge unemployment’. This paper focuses on the second form, the ‘facilitated receipt of benefits for older persons’ (FRB). Our paper describes socioeconomic characteristics of persons who benefit from the regulation for a FRB and reports on their motivation to take it up. Based on a regression analysis, we analyse factors on a micro level influencing individual decisions for or against the FRB. While the FRB looks like a form of early retirement, it might be used by persons who search for employment only selectively as a protective shield against pressure from the Public Employment Services (PES) to accept any job. From the perspective of institutional theory, the results show for the German case inherent contradictions in labour market policies aiming to cope with an ageing labour force and mass unemployment especially among the older workers at the same time.