European governments ‘failing’ ageing workforce

8637213475_c77abeb0e3_oEuropean governments are failing to get to grips with the challenges of an ageing workforce.

In a report published this week, think-tank the International Longevity Centre argues that skilling up the older workforce, supporting older women in work and improving health are crucial to create higher participation of older workers.

Governments have not met an EU target set in 2001 to achieve 50% employment rate of older workers by 2010, said the report. Fewer than half (48.8%) of European citizens aged 55-64 were in employment in 2012. Over the period 2002-2008, the average age of labour market withdrawal had only increased by an estimated 1.3 years, from 60.1 to 61.4.

Whilst the employment levels of older workers has increased over the past decade by 10%, the ILC pointed out that there is significant variation across Europe. Just 13% of Hungarians aged 60-64 were in work in 2010 compared to over 60% of Swedes.

In the UK alone, there are 13.5 million job vacancies that need to be filled in the next ten years. Only seven million young people are expected to leave school or college during that time.

Across Europe incentives to retire early are gradually being removed while some state pension ages have started to increase. However, the report noted that some incentives to retire early remain.

The ILC added that government initiatives to support older workers are often poorly evaluated, which makes sharing best practice difficult.

However, it identified various measures that have been taken by European governments:

  • Changes since 2006 in Sweden offer more favourable treatment for work related income than pension income.
  • Reforms in Croatia have meant that those who retire early are now subject to between a 0.15% and 0.34% loss every month in the value of their pension. In contrast, people who delay retirement are entitled to a 0.15% monthly increase in the value of their pension.
  • France has introduced a gradual retirement scheme, which allows workers to reduce their working hours on reaching 60 (62 in 2017) and receive a proportion of their pension in return.
  • A Portuguese initiative gives preferential access for older people to lifelong learning.
  • The Finnish government has invested in the KESTO-program, which built up a database for research on extending working life.

Challenges remain, and the report said issues such as gender inequality – women have better life expectancy than men but participate less in the labour market and retire earlier – need to be tackled.

It said older workers often have lower levels of education and qualifications than young people; many have not worked for 12 months or more; they experience negative attitudes; and suffer poor health. Policymakers need to be aware that older workers are more likely to be self-employed, on open-ended contracts, or working part-time.

David Sinclair, assistant director of policy and communications at ILC-UK, said: “Europe’s economy is driven by the skills and talents of its people. As our society ages, it will therefore be increasingly important to make the most of the potential of older workers. Yet few European governments have got to grips with the challenges of an older workforce.”

He added: “We must not however, pitch one generation against another. European policymakers must focus on tackling the barriers to employability across the life course. Flexible working and opportunities for people of all ages to develop their skills are vital. We must tackle ageism whilst also offering older people the opportunity to retire gradually. Governments across Europe must better evaluate initiatives and share their successes with their colleagues”.

Speaking at the launch of the research, pensions minister Steve Webb MP said: There are more older people in work than ever before, despite difficult economic conditions. I am determined that more employers will make the most of the talents and experience of older workers.”

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Categories: News, Policy

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