EUROPEAN PAPERS ON THE NEW WELFARE

Active Ageing: a core policy priority for the European Union

Abstract
In view of the ongoing ageing and coming shrinking of their working-age population, the Member States of the European Union have agreed bold goals for increasing the employment rate and the exit age of older workers. Progress so far has been modest and with enlargement the challenge has become bigger. EU policies however lend constructive support and Member States are stepping up their efforts to institute better regimes of age management. As policy measures begin to kick in they are likely to be helped by an upward shift in the skill level of older workers and growing labour scarcity. Though it may be difficult to fully meet the targets of a 50% employment rate and a 5-year delay in the exit age by 2010, the relative role of older workers in the European workforce is likely to be substantially strengthened over the next 5-10 years.

1. Introduction

In its synthesis report for the March 2004 European Summit, the Commission highlighted active ageing — in the sense of working longer and retiring later — as one of the three core areas where much greater efforts are called for if the Union is to deliver on the Lisbon strategy. This elevation of the reversal of early exit patterns to one of Europe’s crucial policy priorities marks the culmination of developments under way since the Commission introduced the notion of active ageing in 1999.
In rapid succession the EU had adopted legislation outlawing discrimination in employment including on grounds of age (2000), agreed a special employment guideline on active ageing (2000), and set itself two important strategic objectives by 2010: to increase the employment rate of older workers to 50% (Stockholm 2001); and to delay by five years the age at which older workers stop working (Barcelona 2002). It had furthermore flanked these employment initiatives by agreeing a set of pension objectives, which pledged to secure good incentives to working longer in retirement related tax-benefit structures.
This article briefly reviews the background to and content of the active ageing agenda before tracing recent developments in EU policies, examines present progress towards the targets and discusses the likelihood of major advances over the next 5-10 years.

2. The early retirement trend

The trend towards ever-lower exit ages has become a feature of labour markets across the European Union. Thirty years ago, the participation rates of male workers aged 55-64 were only 10-15 percentage points lower than those of prime-age workers. Today the difference has widened to 40-50 percentage points in some Member States. From the early 1970s till the late 1990s, the participation and employment rates of older (male) European workers have been in constant decline2. Although recent data suggests that this trend may finally be levelling out, Europe is a long way from having reversed the ‘stampede’ towards early exit.
There are important variations in the form and extent to which it has manifested itself3, but the trend towards ever-lower exit ages has been present in all Member States. While rooted in the erosion of workability, as well as in labour market pressures and age-biased work place practices, the decline in the participation of older workers has been accentuated and consolidated by public policies offering easy access to early retirement. Over time these policies led to the institutionalization of wasteful practices of age management. They also gave rise to a veritable culture of early retirement expectations and practices. Ageing workers, their colleagues and personnel managers began to expect work careers to end some 5 to 10 years before workers became eligible for an old-age pension — and to plan and act accordingly.
This is beginning to change. Governments have tightened access to early retirement and increased labour market support for older workers. But poor practices of age management in work places and labour markets are well ingrained and changes in these and in worker expectations are slow to occur. Without the active support and commitment from employers, trade unions and older workers themselves, participation and employment rates are unlikely to improve sufficiently. Policy makers are therefore increasingly seeking to work with the social partners and turning their interest to concrete strategies for improving the employability of older workers and for adjusting employment conditions so that better opportunities for work after age 50 become available. This is quite appropriate since many years of wasteful practices of age management have left relevant stakeholders fairly unprepared for the requirements of the coming period. Management practices will need to adapt to a tight and ageing labour market, placing a premium on innovative strategies, which retain and reintegrate older workers, whilst also securing productivity and profitability.

Fritz von Nordheim Nielsen: European Commission Employment and Social Affairs DG, E-1 Fritz.Von-nordheim@cec.eu.int
1 The assessments and views expressed in this article are those of the author and they do not necessarily match those of the European Commission or its Services.
2 In the same period employment rates for women in this age group have been growing constantly as a reflection of the growing activity rates in successive cohorts of women. Yet, beyond this structural trend, female workers also encounter major barriers to continuous employment as they age and their problems are easily on par with those of their male colleagues.
3 perception of early


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