EUROPEAN PAPERS ON THE NEW WELFARE » Paper No. 13 /2009

The current dimensions of the socio-economic development of Bulgaria impose the multi-pillar/multi-stratum model of pension security, which guarantees the simultaneous existence, coordination and mutual complementing of various forms of pension security protection.

Since January 1, 2000 a new normative order has been in effect in Bulgaria. This has laid the foundation for the contemporary multi-pillar model of pension security protection as a concept designed and constructed in the spirit of good European practice and at the same time distinguished by a number of national peculiarities.

The world financial crisis, which erupted at the beginning of 2008, will inevitably have an impact on the functioning and development of the Bulgarian pension security system. At this stage it is extremely difficult to produce empirical data on the value dimensions of the contingent adverse ramifications that have a direct or an indirect effect as well as an immediate or delayed impact (though their expected trends can be outlined).

Key words: pension security, multi-pillar model, public pension security, supplementary pension security.

1. Introduction

Pension security represents that portion of differentiated social security set aside with a view to providing protection in the form of payments intended to compensate for the adverse repercussions following the onset of a state of lasting unemployment caused by the manifestation of labor risks. Its economic nature finds its expression in the diversity of distributive and re-distributive relations in the process of the forming and distributing of the security fund in the light of desired security and the effective functioning of the economy.

Pension security as a branch of social security originated as a result of the continual development, alteration and improvement of the organizational forms of support for incapacitated individuals. At the same time, pension security — being relatively independent as a system-forming component of social security as a whole — is the subject of an uninterrupted development and improvement in line with objective social needs, expectations and dispositions.

The current dimensions of socio-economic development necessitate the multi-pillar/multi-stratum model of pension security, which guarantees the simultaneous existence, coordination and mutual complementing of forms¹ of pension security protection as follows:

• Abiding by the general template of providing security protection — establishment and subsequent distribution of a differentiated fund while observing the principle of counter payments and the right to make claims;

• Being diverse in view of the number of individual parts involved in realizing pension security protection. The initiatives for implementing the forms of pension security protection in line with this diversity are: public, company-based and private. They also include the underlying principle, compulsory and voluntary character, and its derivatives: the manner of financing/covering costs or capital, scope as to pre persons and risks, organization of payments, etc;

• Finding feasibility and concretization through the variety of pension schemes;

• Oriented toward ensuring a normal level² of satisfying the needs of individuals entering retirement.

Plamen Yordanov: “D.A.Tseenov” Academy of Economics in Svishtov, Bulgaria. E-mail: jordanov@uni-svishtov.bg .
About the Author: Dr. Plamen Yordanov is a Chief assistant at the Department of Insurance and Social security, “D.A.Tseenov” Academy of Economics in Svishtov, Bulgaria. He holds a Ph.D. from the same Institution (2005). His main research interests and publications are in Social security, Pension systems and related matters. Dr. Yordanov is an academic lecturer in “Labor Economics”, “Theory of Social Security”, “Social Security Accounting”, “Analysis and Controlling of Social Security” and “Social Security of Farmers”.
1 We consider the concept of ‘forms’ of security protection as a way of generalizing on the activities guaranteeing protection against the adverse ramifications of the manifestations of the risks, grouped according to their definite features, for example, initiatives for carrying them out, involvement in setting up people’s incomes at retirement, underlying principle, etc… See Georgiev, Zdr., Pl. Yordanov, Theory of Social Security, Svishtov, 2001, p. 97 on.
2 In this respect it is recommended that the compensation level of final incomes be between 70% and 90% given the flexible involvement of the various forms of pension security protection — between 40% and 50% coming from public protection, between 10% and 20% from the company-based one, and between 15% and 20% from the private one. In different countries the relationships between the above-mentioned forms of pension security protection as sources of income vary when persons are pensioned off — for example, in Germany the relation is 85/5/10%, in Great Britain it is 65/25/10%, in the Netherlands 50/40/%, in Switzerland 42/32/26%. See Bero Roos, Der Aktuar in der betrieblichen Altersversorgung, Seminar ueber Verrsicherungsmathematik — Universitaet Hamburg, Februar, 2002, S. 8; Betriebliche Altersversorgung /Konpendium/, Verbund Selbstaendiger Finanzdienstleister, S. I u.a.

Italy and Denmark from Early Retirement to Active Ageing. Problems and Solutions for Structural Unemployment and Pension Funding

Furio Stamati — Sat, 10 Oct 2009 21:32:34 +0000

1. Introduction: The Possibilities of the New Politics

Over the last fifteen years the welfare state has undergone an undeniable process of policy and institutional change. Confronting the empirical evidence of an unexpected political commitment to unpopular socio-economic reforms, the influential interpretation of welfare institutions as immovable objects or frozen landscapes revealed itself to be an oversimplification (Arza and Kohli, 2007). The role of societal and technological change has been newly recognized as a source of challenge and policy crisis, thus an engine of change (Esping Andersen et al., 2002). The notion of crisis (or challenge), however, has also evolved. The stagflation pressure of the Seventies, the ‘big government’ worries of the Eighties and the globalization debate of the early Nineties all framed crisis as a constraint on public expenditure and a challenge to national politico-economic sovereignty and social citizenship (Castles, 2004). Conversely, throughout the Nineties, the old drivers of expansion themselves have been reframed as a new kind of crisis, under the budgetary constraints of unanimously recognized ‘hard times’. As population ageing (World Bank, 1994) persistently pushes social expenditure against the old social risks of the former core labour force, the growth of the third sector and rising female employment create urgency for a new set of social protections (Myles and Quadagno, 2002; Bonoli, 2005).

While both convergence and pure retrenchment failed to materialize, the distributional consequences and the political endorsement of the process of so called ‘recalibration’ (Ferrera et al., 2000) have let down the dominant reading of a ‘new politics’ of the welfare state and its expectations of stability and policy making by stealth (Pierson, 1998). Reforms have forced different welfare regimes, states and programs to adapt in unique ways to the new challenges and policy trade offs. Even in the toughest scenarios, a combination of rationalization of outlays and re-commodification of the labour force extended coverage to new and traditionally unprotected social groups (Arza and Kohli, 2007).

These elements of complexity call new attention to what was once called ‘the possibility of politics’ (Ringen, 1987). Since social policies are entwined in complex interactions and trade offs between production, distribution and redistribution, reformers are able to push forward their preferred outcomes, purposely circumventing some of the organizational and institutional constraints that their operative context imposes on their opportunities structure (Hacker, 2004; Streeck and Thelen, 2005). The orthodox reading of institutional stability is thus charged with underestimating the fact that, even if singular policies can manifest increasing political and cognitive returns, their interaction can create self-undermining vicious cycles (Crouch and Farrel, 2002). In the real world of reforms, the choice to address multi-dimensional policy linkages may even increase the sustainability of unpopular interventions.

This paper attempts to analyze a similar multi-dimensional reform pattern, comparing the sequences of labour market and pension reforms enacted in Denmark and Italy between 1992 and 2007. The two reform pathways both focused on the link between retirement and labour market policies and fostered a shift from a paradigm based on early exit from the labour market and generous retirement conditions to a new one based on active ageing and fair pension treatments. In particular, I am interested in the common effort to phase out early retirement and in the evolution of a multi pillar pension system in the two countries. The puzzling question here is not why policy has changed or why there is some form (or some lack) of convergence. Denmark and Italy were, and still are, one of the most heterogeneous possible pairings among European countries. Rather, my question is why some specific reform patterns or dynamics have emerged. Following the logic of a most-different systems design to maximize the variance of possible intervening factors, I will look for common but independent factors capable of explaining the common effort:

• to reduce the scope and attractiveness of institutionalized pattern to early retirement and

• to establish or (in the case of Denmark) to improve a multi-pillar pension system.

In the first section I will provide the general rationale of the research. The second and the third paragraphs offer an empirical account of the reform process in both countries, while the fourth concludes with three tentative generalizations.

2. Denmark and Italy from Challenges to Reactions

Having been two countries in crisis at the end of the Eighties, both enacted major socio-economic reforms over the last fifteen years. Denmark introduced the most celebrated policy paradigm of the last decade: the flexicurity model. Italy, in its turn, pioneered the last wave of pension reform in Europe, adopting a ‘Swedish’ NDC contribution formula in 1995.

At first sight, similar changes were somewhat unlikely in both countries. One reason is that Italy and Denmark were expected to handle their institutional complementarities by improving their institutional coherence in the direction of greater coordination (Hall and Soskice, 2001; Ebbinghaus, 2006). Instead, the outcomes of the reforms in the two countries indicate a further hybridization in terms of a shift towards more liberal solutions, with particular reference to the Danish flexicurity (Campbell and Pedersen, 2007) and the relaxing of the public monopoly over pensions in Italy (Ferrera and Jessoula, 2006). Furthermore, both the phasing out of early retirement and the revision of the structural configuration of their pension systems are visible and sensible interventions on very popular and strongly institutionalized features of their political economy. As a consequence it is deemed unlikely that they will take place according to an orthodox reading of institutional path dependency (Pierson, 2001).

A better explanation can be found by analyzing the interaction between the challenges faced by the two countries and the intervening effect on political agency and policy legacies at the national level. This is particularly the case for early retirement and for the introduction of a multi-pillar pension system. The institutionalization of the former is traditionally considered a case of institutional bricolage and of a creative reinterpretation of the existing schemes (introduced with a different mission) (Kohli et al., 1991). The latter, in its turn, is intimately linked to the interaction between the state and the market (and the financial market) in the provision of welfare (Bonoli, 2003). There is no single factor that can explain how the various links between the labour market and the different retirement routes can or should be crossed. Challenges and crises, as direct causes of policy change, only exist in interaction with a more complex structure of self-sustaining but also contradictory and unstable institutional settings. Reinterpreting the notion of institutional complementarities, the emerging post-determinist (Crouch, 2007) branch of neo-institutionalism has precisely underlined how ambivalent is the effect of existing policy linkages on the stability of the whole regime and of its components (programs) (Campbell, 2004; Hacker, 2004). The opportunity to correct multidimensional problems acting on different fronts, while providing broader compensations and concessions, can unleash the potential of new coalitional dynamics and argumentative strategies, lead to more plausible problem solving efforts and improve the commitment to reform. Consequently, political entrepreneurship strongly influences this phase of re-consolidation (Campbell, 2004; Natali, 2008).

Furio Stamati: Istituto Universitario Europeo, Department of Social and Political Sciences, Via dei Roccettini 9, San Domenico di Fiesole, 50014 Firenze. Please e-mail comments to: Furio.Stamati@eui.eu

The Labour Market for Older Workers in Sweden: Changes and Prospects

Gabriella Sjögren Lindquist and Eskil Wadensjö — Sat, 10 Oct 2009 19:17:13 +0000

1. The Demographic Development

In most developed countries the share of the population of active age is declining. The share above active age is increasing due to low fertility and the fact that people are living longer. The part of a cohort living to the age of 65 increases and those who reach that age live longer beyond that. Statistics Sweden has produced a forecast which indicates that the number of older people for each person of active age will increase from c. 0.3 in 2004 to more than 0.5 in 2030. The number of young people (below active age) per person of active age will remain at the same level, c. 0.5.

An ageing population means increased public sector expenses for health, old age care and pensions. If one does not want to raise the tax rates, lower pensions or lower the quality of health care, old age care or other public sector programs, the total number of hours worked in the economy has to increase. An increased number of hours worked means higher tax revenues at given rates.

The labour supply may increase in several different ways which complement each other. The most important ones are: 1) an increase in the number of hours worked by those who are employed; for example a number of those working part-time might switch to full-time, 2) a more rapid move from school to work; this transition now takes several years for many people, 3) a higher employment rate for groups who presently have low employment rates such as people with disabilities and refugees, 4) increased labour immigration, and 5) a higher retirement age. We will discuss the last of these five options here.

An argument for trying to raise the age for leaving the labour market with a pension is that the number of years with a pension increases if the pension age is not changed. The health of older people has gradually improved, older people more often have higher education and fewer have physically demanding jobs. These factors all argue for continued work to an older age.

One way of illustrating this is to study the remaining life expectancy for those who reach the age of 65. Table 1 shows the development up to 2007 and a forecast for future development. The starting point is the expected remaining life span for those aged 65 in 1971-1980, the decade in which the retirement age was lowered from 67 to 65 in the social security old age pension scheme. We calculate what the pension age would have been if the expected number of years after being pensioned had been the same as in the 1970s when it was 65. The calculation shows that it should have increased by 3-4 years up till now and should increase by one year more by 2020.

Table 1: Expected remaining life expectancy at 65 years of age and pension age if there is the same expected number of years with a pension as in the 1970s

Note: The prediction for 2008-2020 was made by Statistics Sweden before the values for 2007 were known. This explains why the value for 2008 is lower than for 2007. We have set the value for the pension age in the 1970s to 65; the pension age from 1976 on.
Source: Statistics Sweden, Population statistics and own calculations based on that.

2. Labour Force Participation among People of Older Active Age in Sweden

For many years labour force participation and employment declined among older people in Sweden and in other countries. Part of this may be explained by a lowering of the age for a full pension from the social security pension schemes and by higher pensions. But the exit from the labour market also increased in the age groups below the normal pension age — early exit became common. The decline in employment in this age group (older active age) is closely related to the business cycle development and to the possibilities of getting an income transfer before the normal pension age. More people lose their jobs in downturns of the economy and many countries introduced favourable forms of economic support for those who left early.

In Sweden this development was not as pronounced as in many other countries. Sweden belongs to a small group of countries with a relatively high age for exiting the labour market. The development towards a lower real retirement age (and in not a few cases a lower formal retirement age) ended in the mid-1990s in most countries including Sweden, partly as a result of a policy shift. In many countries the lowest possible age for a full or reduced pension was raised, different early exit roads were blocked or made less favourable. The result was also a higher average age when leaving the labour market for retirement. It is important to distinguish between receiving a pension and discontinuing working. In many pension systems (but not in all) it is possible to have an old age pension and continue to work and it is also possible to stop working and wait to take up a pension (and in many cases get an income transfer other than an old age pension). In Sweden the average age when leaving the labour market is at present two years lower than the average age for starting to take up an old age pension, which is close to 65.

Gabriella Sjögren Lindquist: Swedish Institute for Social Research, Stockholm University and REASSESS, NOVA.
Eskil Wadensjö: Swedish Institute for Social Research and SULCIS, both Stockholm University & REASSESS, NOVA.

Possible Activation Strategies for Older Workers Dismissed Early from Employment

Francesco Pirone — Sat, 10 Oct 2009 17:17:01 +0000

1. Introduction

For over twenty years demographic research has revealed that the more economically developed countries are witnessing a new demographic phase, known as “second demographic transition”. Among the principal implications of this is the change in the age structure of the population with a growth in numbers among the older age groups. The increase in average life expectancy and particularly the lengthening of the period of life in good health and in complete autonomy, have profound implications for social organisation. Among these, research has revealed a redefinition of social times and of the roles linked to age. Picking up on Peter Laslett’s well known thesis (1989), from the lengthening of the average life in good health emerges a ‘new life map’ in which, limiting ourselves to the older ages, new life times are revealed which fall between the ending of productive roles (in the labour market) and the reproductive ones (in the family and domestic sphere) of middle age and the final loss of personal autonomy. We are dealing with new social times, in which one observed the contemporaneous destabilising of end of career paths and the redefinition of transition mechanisms towards retirement with wide margins of uncertainty on roles, identities and processes of social recognition. In the third age complex social innovation processes are experienced, which revolve around the redefinition of the mechanisms which govern the transition from work to retirement, from active life to retired life.

The widest and most discussed debate on this subject, however has been about the economic consequences of demographic transition, focusing attention on the mid to long term sustainability of the welfare system. In this regard Giovanni Battista Sgritta speaks of an ‘unnoticed revolution’ underlying the demographic transition, maintaining that “any alteration to the structure by population age is bound to reflect on the system of rules that determines the possibility of acting, exchanging, participating in political life, protecting one’s own interest and relationships within the family (…). Demographic ageing has introduced a deep ‘asymmetry’ between age distribution and the symbolic and regulatory framework which till then had governed the relationships of exchange and solidarity between age groups” (1993: 24), thus necessitating a general reorganisation of welfare mechanisms, and in particular a reform of the welfare system.

In the case of Italy, since the early 1990s there has been a long and articulated process of reform of the public welfare system¹ in line with European Union guidelines. The main objectives of this reform have been to delay the time of retirement, both by raising the minimum criteria for obtaining the pension and by reducing institutional early retirement options².

Pension reforms, most sensitive to the macroeconomic sustainability of public welfare, have adopted a reductionist approach to the subject of work and the employment of those advanced in years. In the labour market, indeed, there has not been a corresponding lengthening of working careers. In fact for some occupational groups most exposed to functional ageing and no longer safeguarded by welfare type protection new risks have emerged of social exclusion linked to involuntary early exit from the labour market no longer guaranteed by welfare type protection. When it comes to extending participation in the labour market in advanced years, generally speaking companies, the industrial relations system, the public bodies working in the active employment policies area, have often been unprepared for managing the ageing of the work force or dealing with the phenomenon of early exits from jobs.

To help face the challenges connected to demographic transition, particularly in governing a complex process of social innovation of welfare institutions and of labour market regulating, led by the European Union, an active ageing strategy has been adopted. This is based on a global approach to the ageing question, centred on the key notion of ‘activation’ (Barbier, 2005). Starting from the Council of Lisbon of 2000 and subsequently the creation of the renewed Lisbon Strategy of 2005, the notion of activation has been one of the directional pillars of the European Union’s economic and social policy. It directs governments towards policies to stimulate global increases in employment rates, with specific objectives for older workers. Active ageing, aimed at making the elderly active in the labour market, has developed an adaptive institutional approach with the objective of guaranteeing the health, independence and social productivity of individuals for as long as possible, retaining that, as Alan Walker writes, “active ageing could supply an important means of seeing to it that demography doesn’t become an obstacle to sustainable development, of preventing radical changes to social protection systems and of avoiding any generational conflict and preserving the European social model” (2005, p 1).

Within the active ageing strategy, moreover, there is a more coherent convergence between welfare system reforms and activation policies for people advanced in years. This is particularly the case when it comes to the development of the so-called ‘fourth pillar’ (Reday-Mulvey, 2007), i.e. the incentive for those advanced in years to work, in some cases having recourse to forms of part time work or non standard models of remuneration. In the public and scientific debate however, the analysis of the costs of ageing have dominated, while it has been only recently that new interpretations have been developing that view the third age as a new productive phase of life in the areas of economy or of socially useful activities. There is a place in this area of thought for the view of the healthy elderly person as a social resource and no longer as a cost.

The analysis of the relationship between age, work and participation in the labour market of people in advanced years, before or after crossing the retirement threshold, is crucial in the active ageing perspective. Our work comes within this perspective and, on the basis of several field studies³ it concentrates on the employment situation of the oldest workers in the Italian labour market. On this subject we consider the institutional regulatory mechanisms for the transition from employment to retirement (paragraph 2) and of company management of human resources practices in relation to age, with particular reference to the manufacturing sector (paragraph 3). The reference framework having been determined, possible strategies for the activation, in the Italian labour market, of individuals over fifty who have lost their jobs, or who are inactive and on the slippery road to retirement are analysed (paragraphs 4,5 and 6). To these are added some brief considerations, presented at the conclusion of the article.

2. Ageing and Employment for the Oldest Workers in Italy

Demographic ageing in Italy has come about faster and more intensely than in other European countries. In the last twenty years between 1988 and 2008, the percentage incidence of people of 50 years and over has risen from 32% to 39% of the total population, a growth that especially concerned the over 65s. Comparing the Italian data with those of the EuroArea-15⁴, we find that in Italy the incidence of over 50s was greater at the beginning of the period in question, (32% compared to 30.8%) and then increased faster than in the other countries over the following twenty years (+21% compared to +18%). If initially this phenomenon was attributed to a large extent to the reduction in the birth rate, most recent trends demonstrate that it is instead, the increase in average life expectancy that determines the growth in the proportion of the older age groups relative to the total population (Baldi and Cagiano de Azevedo, 2005). In the coming decades this phenomenon will be even more noticeable, as official Istat demographic projections reveal. From these it emerges that the percentage incidence of people aged 50 and over will be about 40% in 2010 and will account for half the population in 2050⁵.

With regard to these demographic trends, despite an inversion over recent years, the main labour market indicators reveal, a low level of employment among the older age groups, once more strongly indicating a situation that has been defined the “paradox of functional ageing in demographically elderly societies” (Carrera, Mirabile, 2000: 14). Looking at the available statistical information, from the Eurostat data⁶ it can be seen that in 2007 the employment rate in Italy in the 55-64 age group was 33.8%, a much lower rate than the European average whether one considers the EuroArea-15 (46.5%, or that of the enlarged European Union of 27 (44.7%). These data represent a critical situation, especially when account is also taken of the fact that the European Commission at the Stockholm European Council of 2001, had set the objective of achieving an employment rate for the 55-64 age group of 50% or over by 2010. Looking back and comparing the employment rate in 2007, with that recorded ten years earlier in 1997 however, a growth from 28% to 33.8% is revealed, an increase greater than that recorded for the entire population aged 15 and over (which rose from 41.7% to 45.9%). At the same time, however, the employment rate for those over 65 years went down slightly, from 3.8% to 3.2%.

Going back to the 2007 data (Istat, 2009), in the 55-64 age group the non-active population represented fully 65% of the total (i.e. 4.6 million out of a 55-65 year old population of 7.1 million). Among the inactive the most important groups were firstly the one made up of individuals already retired, 47%, then the group of those who declared they “had no interest in work” accounting for 27%; 9% had health problems, and finally, the discouraged workers, (5%) i.e. those, who convinced they wouldn’t find work, had given up actively looking for a job. An analysis of the rate of unemployment shows it is very low, (2.4% but if one only adds the discouraged workers to those looking for work, the unemployment rate rises to 10.3%. To sum up, there are few employed people among the 55-64 year olds in Italy compared to the European average. This is due to the early exit from the labour market, firstly for early retirement⁷, secondly because of the great difficulty in finding work once over the 50 year threshold (if not before), and finally, to a lesser extent, because of people’s lack of motivation in relation to work.

This brief statistical picture shows that in Italy the phenomenon of early exit from the labour market persists, and particularly so for the number of people of advanced years who join the no-active population. Using the Political Economy of Ageing approach (Kohli, et al. 1991; Maltby, et al., 2004), some recent analyses (Mirabile et al., 2006) suggest that this is due to inertia on the part of the Italian economic and social system, when it comes to adopting an integrated approach to active ageing policies. While welfare reforms have aimed at delaying retirement, in the labour market there has been little in the way of developed support for the employment of the elderly. The social protection system and the negotiation practices of the unions, moreover, continue to deal with the passive defence of workers removed from employment early, despite the fact that this strategy is applicable to an increasingly small number of older workers from the great industrial corporations. Using the pattern prepared by Anne-Marie Guillemard (2003), one can see a shift in the Italian case, from an original model in which, while there were few active employment policies, there was a high level of protection against the risk of unemployment, to a new model marked by a weakness in both dimensions (Figure1).

Figure 1: Typologies of the trajectories on the labour market of elderly worker in terms of the relationship between labour policies and those relating to social protection

Source: Guillemard (2003: 74); Our elaboration.

Actually, looking at the last decade, with regard to active employment policies at national level, workers over 50 years of age who are out of work or about to lose it are considered ‘disadvantaged workers’ and therefore can take advantage of the insertion contract⁸, besides being protected against discriminatory practices⁹. When it comes to the decentralisation of employment policies and employment services, the framework is much more developed. However current research shows that at a regional level the subject of older workers generally has little specific place in planning documents, but rather can be found among measures concerning a wider public in the area of education and equal opportunities (Folini et al., 2004: Gilli e Marocco, 2006; Mirabile et al., 2005; 2006).

Concerning cover against the risk of unemployment, instead, until the mid 1990s, besides early retirement there was a whole range of institutional safeguarded pathways out of the labour market, created by means of the use of social safety valves and company incentives, usually aimed at the employees of large industrial corporations. In quantitative terms Istat records that in the second half of 2006, around 9% of retired workers had taken advantage of an incentive to take early retirement (Istat, 2007b). These strategies were made easy by a corporate industrial relations model, and by the preparedness of the public player to use economic resources and National Insurance contributions to support early exit from the labour market, guaranteeing a certain level of income, agreed with the unions. In the current phase, however, there is a crisis in these negotiation practices. There are at least three reasons for this: (a) the first linked to demographic trends: a slow down in turnover due to the dwindling number of young members of the work force entering the labour market; (b) the second concerns welfare restructuring: the reduction in institutional early pathways out of the labour market and the favouring of activation tools, rather than passive measures for guaranteeing income; (c) the third is linked to the evolution of occupation composition: the increase in older workers dismissed from small and medium companies where traditional forms of social protection covering the slide towards retirement are not applied.

The analysis shows that a rebalancing between social protection measures and those relating to activation in the labour market is called for, both to take account of people who cannot be activated and to allow the adjustment of active employment policies through the creation of a strategy specifically aimed at keeping people in the labour market despite advance in age. The active ageing approach requires also that there be strict coordination between the various policy areas otherwise — as Massimo Paci warns — “these interventions are destined to have poor results, if they do not form part of an integrated ensemble of policies that deal with problems relating to health, technology, business organisation, and in general, a culture on old age shared by workers, employers and unions.” (2005: 174). It is important therefore, that company and worker action strategies and existing conditioning in the various local action contexts be analysed — at the macroeconomic level.

3. Businesses and Older Workers in the Manufacturing Sector

The Italian industrial development model, even in the economic miracle years, was characterised by a marked selectivity in the choice of workers, with a preference for workers “in the flower of age” (De Cecco, 1971, Paci, 1973), usually masculine, who could adapt to high productivity industrial production systems. In this model retirement was the mechanism that safeguarded high levels of productivity from the risk of functional ageing on the part of the work force (Mingione, Pugliese, 2002), but it was also the expression of a Fordist social pact (Ambrosini, Ballarino, 2000) in which work and dedication to the company for one’s whole life were exchanged for employment stability and protection from a codified series of various social risks including reduction of earning capacity in old age.

This ‘pact’ went into crisis with the first industrial restructuring of the eighties, when as a result of the drastic reduction in manufacturing employment a considerable number of employees, more or less near the retirement threshold, were pushed out of the labour market through the adoption of various retirement schemes or by means of a protected shift towards retirement. During these years businesses developed workforce rejuvenating strategies using the young in/old out pattern (Contini, Rapiti, 1994) that only partly went into crisis as a result of the welfare system reforms from the early nineties till the present. Selectivity on the part of businesses has been increased, moreover, with the de-regularisation of the labour market over the last decade¹⁰. Businesses have been more easily able to adopt a human resource management model based on the centro-periphery pattern (Harvey, 1997; Dore, 2005), which has resulted in the ‘fragilisation’ of older workers (Gallino, 2001). Particularly where there is a structural excessive labour force, de-regularisation of the labour market allows businesses to choose components that are most productive, economic and adaptable to the company needs. As a result there is an increase in the ‘peripheral’ aspect in the labour market, with the consequence, on the one hand, of further increasing the vulnerability of traditionally disadvantaged groups, and on the other, of the removal of new groups of workers from the strong “nucleus”, among them the oldest unskilled ones who are always the least safeguarded by the social protection system (Castel, 1997).

Within this general framework, one can find some notable differences in the management of the oldest workers and of the relationship between ageing and work (Molina, 2000). The first difference concerns the speed of technological change in the production sector and in companies. The status of the elderly worker, is actually inversely proportionate to the speed of technological and organisational change in his company. This means that where the change is faster, turnover accelerates and the oldest workers tend to run greater risks of removal from the company; where, instead, the technological and organisational change is slower, more account is taken of the elderly worker since his on the job experience is of greater productive value. In the sectors marked by periodic changes in their technological paradigm, businesses often prefer to get new competences from the market rather than change those within, through the counter-ageing of human resources (Biagioli, et al., 2004). This particularly penalises the oldest workers for whom the cost/benefit ratio of training reduces company expectations on the duration of the working cycle of the oldest employee, in whom it is hardly convenient for the company to invest further resources. Moreover, in the current Italian labour market legislative framework the generation changeover guarantees the company a reduction in the total work costs, greater flexibility when it comes to contracts, and more generally, a reduction in the level of unionisation. The second difference concerns the direct relationship between economic circumstances (general and sector related), and the early dismissal of the elderly, since during negative phases of the economic cycle businesses tend to reduce to zero the peripheral components of human resources including the oldest workers.

In brief the analysis shows that the presence of older workers in the labour market is hindered by glaring recruitment selectivity in the manufacturing sector that produces a marginalisation of workers advanced in years, and also an acceleration in company turnover. Workers with superior professional profiles are less exposed to early exit from the labour market, as is suggested by the employment levels based on educational qualifications¹¹, or of those in productive contexts where on the job experience is beneficial to the competitiveness of the company. From the workers’ point of view early exit from the labour market is mainly a hetero-direct choice, determined by the demand for labour. Within the available margins of freedom workers have developed various adaptive strategies with two common objectives: the first is to maximise pension income, including voluntarily leaving work early in order to benefit from favourable welfare provisions. The second, more general, is that of matching the time and manner of one’s final exit from the labour market for retirement to the balancing of working time and non-working time according to one’s personal preferences.

During the first industrial restructuring, the margins of individual autonomy and collective bargaining on the processes for early exit were such as to better guarantee both objectives. However, from the middle of the nineties on, early exit was increasingly involuntary and, as a result of the crisis, marked by the individual and collective impossibility of influencing the time and manner of the transition from employment to retirement as seen in the preceding paragraph. Faced with the overall re-dimensioning of safeguards linked to employment, in an active ageing perspective the system suffers from the difficulty the public player has in determining labour market regulatory mechanisms capable of guaranteeing the participation and employment of those advanced in years.

From research experience and literature on the subject (Accorini, Gagliardi, 2007) and given the current regulatory framework it is possible to draw some action lines for determining a many faceted strategy for activating older workers dismissed too early from the labour market, in accordance with the analytical pattern discussed in the following three paragraphs. This pin points (a) the typology of the workers targeted by activation policies based on basic education, on the level of professionalism and on orientation towards work; (b) the orientation of the labour market considering companies’ selective strategies; and (c) the policy options of the public player, taking account of the organisation of employment services and of already existing activation measures or ones that could be obtained through their re-orientation.

Francesco Pirone: Department of Sociology and Political Science, Salerno Uiversity of Studies, fpirone@unisa.it
1 Reference is made to the public welfare system reforms contained in legislative decree 503/92 (Amato Reform), l. 335/95 (Dini Reform), l. 449/97 (Prodi Reform) and in the most recent l. 234/2004 (Berlusconi Reform).
2 Italy has followed a welfare reform model similar to that adopted by most continental European countries based on joint penalty and incentive action. On one hand the minimum conditions for taking retirement have been tightened, and on the other, with the introduction of the contribution system pension income for those who leave the labour market early has been reduced. Less use has been made of gradual retirement schemes using a mix of part time work and pension (Mirabile et al., 2006).
3 We are referring here to research carried out in various parts of the country, but mainly concentrated on the manufacturing sector: Pirone (2006), Pugliese, Morlicchio and Pirone (2007).
4 The EuroArea 15 includes the following countries: Belgium, Denmark, Ireland, Greece, Spain, France, Italy, Cyprus, Luxemburg, Malta, The Netherlands, Austria, Portugal, Germany, Sweden, Finland.
5 Our elaboration on the Eurostat data, Population forecasts (2007-2051, .
6 Our elaboration on Eurostat data, Labour Force Survey, epp.eurostat.ec.europa.eu.
7 In many cases these are people who started their contributory career early and who have benefited from seniority pensions.
8 A provision of Legislative Decree 276 of 10 September 2003 enacted on the basis of regulation EC nr. 2204/2002.
9 This refers in particular to the rules in Legislative Decree 216, 9 July 2003, implementing directive nr. 2000/78/CE.
10 Reference is made specifically to law nr. 196/197 and law nr. 20/2003 and implementing decree nr. 276/2003.
11 In the 55-64 age group in Italy, for 2007 the employment rate was 66% among those with university qualifications, 50% for those with diplomas, 31% for those with lower middle school qualifications and 20% for those with primary school certificates. Over 65 years of age the employment rate is 17% among those with university qualifications, going down to 7% for those with diplomas, and well under 5% for those with less than diploma level qualifications (Istat, 2009).

Learning Against Aging. Training Opportunities for the Elderly to Learn in the New Technologies

Elisabetta Risi — Sat, 10 Oct 2009 16:17:10 +0000

1. Introduction

The increase in the length of life represents one of the great challenges for contemporary society. It will reshape the structure and demographic profile of the generational system and of our society as a whole, with consequences for the social and economic system.

The present paper focuses on the idea that the elderly today must be considered an area of heterogeneous population and on the affirmation that many of them manifest the ability and the will to continue to learn in order to remain active.

In particular the elderly have the desire to develop knowledge and skills that can help them improve the quality of their lives, make constructive use of their free time and be seen as capable of contributing to the communities to which they belong. a few studies (Risi, 2007) have reported an increase in the ‘demand’ for courses on the use of the computer and the Internet, given the importance of these technologies in today’s society.

From the planning point of view this implies the need for a rethinking of social policies regarding training activities. State intervention to create activities which support the passage from employment to retirement and which view aging as an active resource still appear half-hearted. The Universities of the Third Age, as substitutes for companies as meeting places (Rossi, 2002), occupy a relevant place in so-called lifelong learning, alongside and complementing public initiatives taking place across the country. Besides theoretical consideration this paper will also describe a quantitative and qualitative mapping (fruit of an exploratory study) of the training initiatives promoted by local public authorities and of the courses offered by the Universities of the Third Age, specifically aimed at making the elderly familiar with the new technologies and their use.

2. From Stereotype to Heterogeneity: An Economic, Cultural and Social Challenge

The way in which governments and economic agencies observe and manage the effects of the increasing length of life process, through the ad hoc creation of instruments, is becoming increasingly relevant. Concerns over social policies on the part of the governments of the industrialised countries are often characterised by fears of their ‘negative’ effects in terms of public spending, taking their eyes off the importance of linking financial sustainability to greater opportunities for employment and social participation for the older population.

In the cultural imagination, in fact, the elderly condition is associated with the idea of a general process of decay, deriving from a progressive loss of both psycho-physical and social and productive ability to function. The characteristics most often attributed to the elderly are weakness and disengagement based on the fact that the onset of the separation of old age from adult age is anchored in the subject’s exit from the productive system. It is a case of a stereotypical and typically ‘modern’ image, attributable to the development of the industrial society and its key values (Cesa-Bianchi, 2003), being no longer appropriate in the current economy based mainly on the service industry.

It is important to recognise that in our culture there are processes which are correlated with the stages in a person’s life: one can be ‘too young’ or ‘too old’ (to drive, to marry, to learn…) to take on determined roles and to take advantage of certain opportunities.

Anglo-Saxons often use the term ageism to refer to discrimination exercised by one or more age groups in relation to other groups. In the West the elderly are considered to have the lowest place of any adult group in our society. Although there is still difficulty in overcoming the arbitrary production oriented-industrial based division of the population into age segments, the ‘monolithic’ identity of the elderly condition has, in recent decades, been called into question in favor of explanatory models, which appear more appropriate. The overall transformations which have characterised the various spheres of society, following a logic of growing complexity of social life contribute to determining a variety of aging pathways. The fragmentation and dynamicity of a number of cultural, institutional and economic factors have favoured the coexistence of aspects of life which permit even individuals in advanced age to occupy different social roles contemporaneously, making the very boundaries of the “elderly generations very blurred and difficult to determine. The elderly condition therefore, becomes a composite in which, not so much different cohorts, but rather different generational profiles, in the true sense, exist together” (Facchini and Rampazi, 2006).

The word ‘elderly’ can no longer have a single meaning: For this reason other terms have been sought, such as the third or fourth age, the golden age or the seniors’ age. The WHO (World Health Organisation) has suggested subdivisions of young-old for those aged 65 to 74; old-old, referring to those from 75 to 90 years; very-old, for the over 90s.

Considering the elderly population as an indistinct and stereotyped group has resulted in their being seen as incapable of learning and of adapting to a world that is evolving. But while a part of this social group may fit this image, there is another part, made up of people who, while age may make them less physically strong, are intellectually able and willing. While until a decade or so ago the elderly were those who had survived the experience of the first and second World Wars, today’s elderly are not only more numerous¹, but have a completely different life experience. Generally speaking they have a stronger cultural education together with an aptitude for analysing the surrounding reality, the ability to interact with it and with basic knowledge of technological products resulting from years of using television, wellbeing and stabilised consumption.

Such observations have led to the use of the term counter-ageing which in Italian is translated as svecchiamento and which scholars (Giarini, 2000) use to indicate the increased potential capabilities (physical and intellectual) in terms of human capital.

Taking account of the increase in the capacity to be active and in better health, compared to the same age groups of the past, scholars in several disciplines in Italy have begun to talk of ‘new elderly’ (see among others Bosio, 1992; Olivero, 2000; Allario, 2003; Tramma, 2000, 2003) in order to emphasise how different are individuals who, live the last years of life in a way that is far from the the still widespread stereotype of the elderly.

The characteristics of this new ‘elderliness’ are still not completely clear or stated with precision. It is a phenomenon in evolution which appeared during the last century and which is being confirmed today. The new elderly is a very diversified part of the population, with experiences influenced by the intertwining of life pathways and careers, and by the demands and needs of the preceding years (Tramma S., 2003).

It has been shown that there exists, among these people, a demand for knowledge, even where there is a shortage of planned offers of education. These types of demand, explicit or latent, vary both as to content and to the underlying motivation for participation in training. While the old-old are characterised by rather modest culture demands and by a limited involvement in social networks, the young-old, on the contrary show a greater interest in new knowledges and a consistent social involvement (Facchini, ed. 2003), The ‘current’ generation of fifty-sixty year olds for example, is one of the last, at least in Italy, who have had a poorer educational experience than they would have liked, due to economic and family constraints. These individuals on the one hand would have the basic competences and knowledge supplied by compulsory schooling that enable them to relate positively to more complex education, while on the other hand they also possess interests which were not completely satisfied when they were younger (ibid).

A part of Italy’s population considered old, with characteristics which are only partly socio-demographic, has, on the whole, an interested and open minded attitude, with a will to experience current society’s innovations, showing the capacity and will to learn new ‘things’ both those which improve the quality of their lives and those which help them make constructive use of their free time. The more skills and knowledge the elderly feel they have, in fact, the more they can contribute to the development of their communities. This leads to the need to discover what role the elderly play in today’s society: an ‘ageing’ as a time of reorienting oneself, without trying to appear youthful at all costs (Scortegagna, 1999).

“Living isn’t living if one’s days are not nourished by passion and curiosity. Communication, migrations and trade have disseminated the culture of permanent education² in many cases turning it into a legend and myth. (…) But learning has long been a socially evident synonym for not being completely out of touch” (Demetrio D., Introduction, in Tramma, 2000). The lengthening of active life, therefore, can constitute an opportunity for today’s society, if changes in the welfare system are directed to dealing with future challenges, and offer education programmes and opportunities for making the most of third age human and social capital.

Elisabetta Risi: Research Doctor on the Information Society. Researcher with the Fondazione Università IULM of Milan, via Carlo Bo, 1 – 20143 Milan, telephone: 02.891412729 – 349.104 7006. E-mail: elisabetta.risi@iulm.it .
1 The literature (Micheli,2003; Tramma, 2003; Cavalli, 2005) refers to these subjects defining them as Baby Boomers.
2 An interesting approach to the processes of lifelong learning is found in Malizza and Gheorghiu (2006).

The Elderly Worker’s Exit from the Company

Renzo Scortegagna — Sat, 10 Oct 2009 16:11:45 +0000

1. Introduction

Population ageing is one of the most significant characteristics of western society in qualitative as well as quantitative terms. This has a direct impact on the organisation of labour and the dynamics that govern it, where a person’s age is considered one of the main reference points for both entry into and exit from the market.
The setting of limits is a response to the need to protect the weak parts of the population from negative effects resulting from working activity. The limit on age of entry, indeed, protects the growth and development phase in the lives of boys and girls, or more generally of adolescents. Meantime it allows them to gain sufficient preparation for carrying out work they hope to do. That on exit concerns the elderly worker, not an easy category to define, but which is taken to be the reference point established for retirement. In this case the limit is intended to free people of a certain age from labour and working responsibility, actually giving them back the freedom to use their own time.
The parameter used in both cases and employed in the relevant laws, is the person’s age, a parameter which sets aside actual subjective conditions relating to the individuals concerned, and standardises the various processes, thus avoiding possible discrimination produced by different circumstances in which people live. In this short article we will speak specifically about the elderly worker in relation to the labour market, viewed both in the final phase of his working career (defined as working old age), and at the moment in which he experiences the passage from work to retirement.

2. The Reasons for and Meaning of Pension

The law establishes that people who reach a certain age have the right to leave their work in order to enjoy the benefits gained during the time devoted to that work. Retirement therefore, can be translated into an opportunity to be able to dispose of sufficient economic resources without the need to involve oneself in obtaining them. Under certain aspects it is a kind of prize and compensation, acknowledged as owing to persons for having contributed, through their work, to the economic and social development of a community. At the same time, with retirement, note is implicitly taken that the advance in years produces a physiological reduction of energy and motivation to work. It isn’t by chance that in common parlance, at least according to tradition, retirement age is also called age of rest.
These reasons were the basis for the birth of the pension institution and its being obligatory and hence for legislation in relation to welfare. These are certainly aspects which represented a highly significant social achievement in the economic and social history of the West. Among other things, thanks also to such achievements, which have significantly altered working life conditions, contexts were created which were favourable to the process of prolonging life, which we are still witnessing. Yet these reasons no longer have that meaningful import they once had. They no longer respond adequately to the needs of contemporary reality. So true is this that they are no longer capable of efficaciously interpreting the changes which have taken place in production processes nor the developments in technology and new work organisations, nor yet the objective improvement in the quality of life, including that of labourers, and hence the changed life styles or the processes by which people age, and so on. In this article it is not possible to adequately analyse every one of these aspects, however easily observable and perceptible they may be in reality. Rather, it is worth underlining some critical aspects, which to an extent represent, and from which these very aspects originate:
•   work, especially in some of its forms, should not be considered only “a biblical curse”, but forms a solid support for one’s identity for those who perform it: in other words work certainly remains the main tool for obtaining the means of satisfying one’s needs, but at the same time it is a strong expression of one’s personality, abilities etc. Therefore it is not simply a chore, but also a means of self-fulfilment;
•   the conditions in which work is carried out have improved decisively because of technological progress, and so the relevance of the back-breaking factor attributable to work has decreased significantly (at least in the vast majority of cases). Consequently a person’s general state of health at retirement is still good overall, and, in any event, sufficiently so as to permit the continuation of work without it compromising or damaging the state of health.
As is easy to understand, we are dealing with aspects which are not recognised in the traditional premises just mentioned and which, both in principal and in practice, do not tally with retirement seen as the obligatory interruption of work activity. And so a new reference framework emerges, in which the end of work and retirement no longer correspond simply to an inability to work or to some kind of expediency for getting out of the labour market.
Usually this problem is considered from the point of view of the sustainability of pension expenditure, and therefore of the characteristics a welfare system should have to be able to respond to the needs for which it is set up. The increase in life expectancy and the later entry by the young into the labour market have resulted in a crisis in the pension system founded on retribution which has been replaced by the contribution based system, which is better suited to economic sustainability. This perspective provides the basis and reasons behind the hypothesis of delaying exit from the market on the part of the elderly. On the one hand this would add greater consistency to the level of contributions made, consequently increasing the value of the available income at the time of retirement, and on the other a reduction in the period in which the pension would be enjoyed because of the decrease in life expectancy from the point of leaving employment.
This hypothesis still meets considerable opposition since it is seen as a deterioration in the life of the worker and a permanent loss of the original and symbolic meaning of the pension as a prize-compensation to the worker.
In fact this subject and the problems resulting from it are much more complex and not limited to mere economic calculations because they are directly interlinked with the questions concerned with ageing, and particularly with active ageing. With this expression (Active Ageing) the World Health Organisation, in 1999, meant to mark ageing as a “process of optimising opportunities for health, participation and security to improve the quality of life while a person ages”. Few words to highlight three fundamental aspects:
•   The processing and progression of ageing, which prevents one from considering old age as a simple category or a biological or social condition;
•   The multi-dimension nature of the process with regard to the physical and biological system, but also mental faculties and social relations;
•   The social nature of the process which unites the individual approach to the social one, placing them both in a systemic perspective of a broader responsibility.
This means that carrying out an activity in old age and taking on commitments and specific responsibilities have a positive influence on the quality of ageing itself, contributing to giving meaning to that age. It is no longer appropriate, therefore to associate the earlier tendency to rest with old age, as can be seen when observing the past.
We should immediately clear up any possible misunderstanding that the previous statement could create, if the concept of activity (in old age) is understood as working activity, or worse still, as work. This would be a simplification that would betray the meaning which studies on ageing give to the term “active” (active ageing). But it would equally be a simplification, if activity carried out in work contexts and therefore within an organisation, were to be completely separated from activity carried out in the context of old age and retirement themselves.
The matter is not easily explained, especially because it is impossible or inappropriate to give a single explanation that applies in every case. Ageing in an active way means keeping interests and plans that require material and non material action to pursue them; it means acknowledging and making the most of acquired experience and passing it on to others; it means cultivating the desire for learning and participating in educational programmes; it means heeding curiosity and seeking the means of satisfying it; etc.. The panorama thus presented is very different from the one relating to activity carried out within the labour market. Moreover some distinguishing points must be introduced regarding, on the one hand, gender specifics, as a result of which men and women do not age in the same way, and on the other, personal and professional characteristics of the workers themselves, which avoid them being considered all the same and equal, simply because they have the same biographical age. Actually the employee ages differently from the self-employed and there cannot be a single model which guarantees that the one and the other will age in an “active” way. This also holds as good for those who made more use of their intellectual and mental faculties when working, as those involved in manual labour; it also holds as good for those who worked in the service sector as for those engaged in industry etc.
Even accounting for diversity it is possible to draw a first conclusion, common to every situation. This is that during working life attention should be paid to active ageing as a perspective and objective to be pursued, and this should not begin only when work stops. This is because ageing occurs in the continuity of life and because moments of passage, though they occur between one phase and the next, cannot be lived as so many breaks, but rather as adaptations required by new contexts and conditions which come about.
So, it can be stated then that ageing, besides being a subjective fact and experience involving the single individual, is also a social matter that concerns the choices and policies made by employment institutions and organisations.
The subject is not as obvious as might appear at first sight, and there is often a deep-seated ambiguity between lingering reasons based in the past and those which come about based on thoughts concerning the present, and still more the future. It is an ambiguity that is often simmering under because of the objective difficulty of explaining the content.
These arguments will be taken up again in the pages that follow, in order to support their importance with some further theoretical reflections and some research results.

3. Working Old Age

So far we have spoken about recorded age and retirement: this is only one of the aspects that concern the relationship between ageing and work.
Before this we should consider a worker’s ageing while he/she is still within a company organisation where, the years spent in the company, i.e. employment seniority, count more than the chronological age as such. This is not only relevant in determining the moment to leave the labour market (together with the recorded age of the worker), i.e. retirement, but it has particular significance within the company organisation itself.
The perspective which thus takes shape is certainly more complex than the preceding one and it is impossible to give an unambiguous description. In regard to this the influences deriving from the company dimension, from the organisation culture characterising companies, from the environment where they are situated, from the ownership arrangements, from the industry sector are important. Despite this multiplicity of frameworks some common lines concerning the management of the elderly worker can be highlighted. The following points in particular are examined:
•   the profile of the elderly worker;
•   age management in relation to the organisation of work
•   the management of labour market exit because of age.
These points are common to all companies, however different they may be. We will take account of this while being aware that it would be worth studying much of the information supplied in greater depth.

4. Profile of the Elderly Worker

In order to speak of profile it is necessary to draw attention to to two different situations:
•   Whether the worker develops his personal carreer and personal employment path in a single place or several places of employment;
•   The work content, and hence the responsibilities covered in working roles.
The ways in which these situations intertwine generate various types of elderly workers. On one hand there are service seniorities which develop within a single company, through the exercising of the same or various roles. These are assigned to people according to criteria that can stress competences in a specific sector or spread these competences in various sectors according to the needs of the company and the abilities of the individual. On the other hand there are seniorities which develop as one moves from one company to another, and where once again, individuals can either perform the same function, progressively improving their specific competences, or seek new functions, in different sectors, with a view to increasing their personal wealth of tools and knowledge.
Independently of the choices which every person makes, the elderly worker profile has certain characteristics that merit clarification:
•   Competences needed for the performance of a certain activity, acquired and developed during a career are improved with experience, i.e. with those “tacit or rather undefined and indefinable competences which form part of a technical-professional profile and which are acquired through non-mechanical repetition of simple or complex operations”. Non-mechanical repetition implies a critical attitude and therefore a personal investment in doing, which cannot be mere performance, a condition which cannot be taken for granted, but that is easily found in a worker at the end of his career;
•   During one’s career one has to use various tools and follow various procedures in accordance with the circumstances and the technological applications with which he is involved. Such a situation requires constant adaptation and real learning and therefore an effort and an investment for the elderly person, who compared to young workers risks a reduction in the value of experience;
•   Staying on in a company makes the elderly worker a witness to what has been defined the company culture, i.e. that “ensemble of values, behaviours, symbols and meanings that constitute the heritage and the mission” of the same company. There can be differences, depending on the length of the time spent in one or more companies, consequent on the type of career pursued, but this takes nothing from the essential worth of such an element. This is the least obvious characteristic in the elderly worker profile, since it is an integral part of his way of behaving and of his way of relating both within the company to which he belongs and towards the outside environment. Yet it is justly considered an irreplaceable component of any skill.

Renzo Scortegagna: University of Padova.

The number of centenarians in Europe

Jean-Marie Robine and Yasuhiko Saito — Sat, 10 Oct 2009 15:08:09 +0000

1. Introduction

It is well known today that the number of centenarians is increasing in Europe but this knowledge is relatively new. In his seminal paper on the compression of morbidity in 1980, one of the main arguments used by James Fries, to justify the choice of his ultimate survival curve distributed around the modal life span of 85 years was the total absence of any increase in the number of centenarians since the 19th century in England & Wales (Fries, 1980). The belief that the number of centenarians cannot increase over time was shared at that time by the main biologists on ageing (see for instance Cutler, 1985; Walford, 1985; Hayflick, 1996).

Indeed, an increase in the number of centenarians was first foreseen in the 1980s through speculative scenarios of mortality decline for the 21st century (Vaupel and Gowan, 1986). Empirical studies soon confirmed that this increase had already started during the 20th century in England & Wales and accelerated after World War II (Thatcher, 1992). In the mid 1990s, James Vaupel and Bernard Jeune demonstrated that the number of centenarians had doubled on average every ten years since 1950 in half a dozen Western and Nordic European countries (Vaupel and Jeune, 1995). Since that time, the increase in the number of centenarians has been meticulously described in Japan (Robine and Saito, 2003; Robine et al., 2003) and in a handful of European countries such as Denmark (Skytthe and Jeune, 1995; Jeune and Skytthe, 2001), England & Wales (Thatcher, 1997, 1999 and 2001), Belgium (Poulain et al., 2001), France (Vallin and Meslé, 2001) and Switzerland (Robine et Paccaud, 2005). Recently, Robine and Caselli collated data on the emergence of centenarians in 10 European countries, i.e. Denmark, England and Wales, France, Germany, Italy, Japan, the Netherlands, Norway, Sweden, and Switzerland. Measuring the centenarian doubling time in each of these countries, they reported varying rates of increase, from generally rapid increases in France, Italy and Switzerland to slower increases in Denmark and the Netherlands. They proposed a specific centenarian rate (CR) within each birth cohort to assess the significance of the actual number of centenarians (Robine and Caselli, 2005). But, by and large, no such study has been performed on the European scale, due to the difficulty and the burden of data collection.

The current analysis of the number of centenarians in Europe was made possible thanks to the development of the Human Mortality Database (www.mortality.org). First begun in 2002 the Human Mortality Database (HMD) began with only four countries which had previously been included in the Berkeley Mortality Database (BMD), but each year additional countries have been added to reach an impressive 38 countries by 2009. All the data used in this paper come from the HMD.

2. Data

At the beginning of 2009, the HMD held demographic data for 38 countries, including most of the European countries. Data were downloaded on March 31, 2009 in the form of population estimates at January 1st for 36 countries, by single age and sex from age 0 to age 110+, from 1946 onwards. In addition to European countries data for Australia, Canada, Chile, Japan, New Zealand and the United States of America were included. Among the European countries excluded were Belarus, Russia, and Ukraine.

In this analysis we kept only the population estimates at age 100 and over from 1946 onwards, except in the case of France where earlier data were needed to draw up Figure 8, for two main reasons: firstly most of the increase in the number of centenarians occurred after World War II and secondly the majority of European countries do not have longstanding vital statistic series. Indeed for the year 1946 the HMD provides population estimates for only 14 European countries (Belgium, Denmark, England & Wales, Finland, France, Iceland, Italy, the Netherlands, Norway, Portugal, Scotland, Spain, Sweden and Switzerland). The data collected for the other European countries starts in 1947 for Austria and Bulgaria, in 1950 for the Czech Republic, Hungary, Ireland and Slovakia, in 1956 for Germany, in 1958 for Poland, in 1959 for Estonia, Latvia and Lithuania, in 1960 for Luxemburg, and eventually in 1983 for Slovenia.

We computed several indicators from this data, including the centenarian rate (CR) defined as the number of centenarians (age 100) per 10,000 people aged 60 years, forty years earlier (Robine and Caselli, 2005). We also computed the 10-year increase in the number of centenarians between the years 1946, 1956, 1966, 1976, 1986, 1996 and 2006. For the last 3 years, 1986, 1996 and 2006, the HMD provide population estimates for 27 European countries. We added together Western and Eastern German population estimates for the years prior to reunification.

Our paper is divided into four sections. In the first section we describe the main features of the increase in the number of centenarians in the European countries whilst the second section summarizes these changes over time at the European regional level. In the third section we highlight the variability throughout the European region in the speed of increase during the last decade, 1996-2006, as well as the centenarian rate. In the final section we compare the European figures with those from Japan as this is the country which since 1986 has led the longevity revolution (Oeppen and Vaupel, 2002; Robine and Saito, 2003; Robine et al., 2003).

Jean-Marie Robine: National Institute on Health and Medical Research, INSERM, France. E-mail: robine@valdorel.fnclcc.fr. />
Yasuhiko Saito: Nihon University Advanced Research Institute for the Sciences and Humanities, Tokyo.
1 This manuscript has been completed while the first author is a Visiting Professor of the Nihon University. We thank Carol Jagger for her comments on a previous version.

Aging in the United States and South Korea: Reexamining the Recommendations of the Commission on Global Aging

Paul S. Hewitt — Sat, 10 Oct 2009 14:24:14 +0000

1. Introduction

In 2002, the Commission on Global Aging, a blue-ribbon panel co-chaired by former U.S. Vice President Walter Mondale, former Japanese Prime Minister Ryutaro Hashimoto and former Deutsche Bundesbank Chairman Karl Otto Pöhl, issued its report outlining a series of policy recommendations for addressing the adverse economic and financial consequences of population aging across different regions and countries. This paper reexamines the Commission’s findings and recommendations in the context of the unique issues raised by aging in the United States and South Korea.

The U.S. and Korean challenges differ markedly. The U.S. faces an ‘aging of the budget’ caused by the retirement of the postwar baby boom generation amid very high rates of per capita health spending on the elderly. Its traditional old-age benefit programs can be maintained so long as the price of goods and services in the health sector are held in check. In contrast, South Korea faces severe depopulation. To address this intractable challenge, Korea must establish a family-centered welfare state — a radical departure from the old-age welfare state model that predominates in the West.

2. Global Aging

Population aging is among the most widespread and revolutionary trends of our time. It is rooted in improved health, which in turn is a byproduct of better nutrition, better medicine and better personal health practices, such as washing your hands or boiling drinking water. These improvements impact the population age structure most directly through reductions in child mortality. Throughout most of human history, women needed to have at least six children in order for two to live long enough to reproduce. After World War II, rapid reductions in child mortality throughout the developing world led to a series of population explosions, as societies failed to calibrate their childbearing to the new survival rates. During this phase of aging — the youth bloom — individuals are living longer, but the proliferation of children causes societies’ median ages to decline. Much of Africa is still in this stage.

However, when fertility finally does adjust downward, it sets in motion increases in the median age. The rate at which societies age is largely a mathematical echo of earlier declines in the birthrate. Beginning in the 1970s, a new phase of aging, caused by below replacement-rate fertility, took hold throughout the developed world. In developed countries, women must have an average of 2.1 children during their reproductive years in order for each generation to reproduce itself. Sustained below-replacement fertility, combined with longer life expectancy at the older ages, will dramatically accelerate increases in the median age, literally, for generations into the future.

Milestones in global aging include:

• In 1950, only 15 countries had a median age over 30.

• In 2000, 62 countries had median ages over 30, and two — Japan and Italy — had median ages over 40.

• By 2050, some 89 countries are expected to have median ages over 40, and 19 of these are expected to have median ages over 50.

• The world median age is expected to rise from 29 today to 38 years old in 2050.

The world’s regions and countries are aging at different rates. While Europe is the world’s oldest region, its aging path is gradual. This is because Europe did not experience a significant baby boom after WWII, and its birthrate consequently did not decline rapidly. North America and East Asia both had baby booms, and their subsequent fall in birthrates has produced a steeper rate of increase in the median age. North America’s birthrate, however, currently is much closer to replacement than that of either Europe or East Asia, with the result that, among the developed regions, its median age will rise the least in the years going forward.

Figure 1: Median Age of Selected Regions

Source: United Nation (2006).

Looking at individual countries, with the exception of Korea, the fastest aging countries are either less developed or post-communist. The most rapidly aging countries saw substantial reductions in their birthrates following baby booms. South Korea stands out not only as the world’s fastest aging country, but also as the country that is likely to have the world’s oldest median age at mid-century.

Table 1

Excludes countries with populations of less than 2 million. Source: UN (2006) and Korean National Statistical office (2006).

The Commission on Global Aging found, in general, that aging would negatively impact the economic and budget fundamentals of the countries most affected. These impacts include:

• Labor bottlenecks. In depopulating countries, the labor supply will begin shrinking year after year, and one industry’s expansion will come at the expense of another’s decline. The economist Joseph Schumpeter described the process of shifting labor and capital away from declining industries and into rising ones as “creative destruction.” But a nation whose labor force is shrinking will have to aggressively abandon its least productive activities in order to make labor available for competitive high value sectors. This high degree of labor mobility is starkly at odds with the lifetime employment model seen in countries like Korea and Japan.

• Lower savings rates. At some point in the aging cycle, the share of the population in its high savings years — the 35-60 age group — will decline, even as burgeoning numbers of elderly begin drawing down their savings in retirement. Dissaving could, in turn, produce current account deficits and create downward pressures on currencies.

• Reduced productivity growth. In addition to the aforementioned impacts on labor supply, older workforces tend to have older skills and are less prone to innovate or take entrepreneurial risk. These labor force characteristics may impede efforts to aggressively replace older industries with rising ones.

• Lower and, in some cases, negative GDP growth. A nation’s gross domestic product is the number of workers times the productivity per worker. A country with zero labor force growth will grow only at the rate of productivity, while countries with shrinking workforces will be pre-disposed to aging recessions — where GDP declines when the labor force contracts faster than productivity grows.

• Chronic budget crises. Under the existing social model, the cost of old age benefit spending as a share of gross domestic product will rise from one year to the next not simply for a few difficult years, but decade after decade into the indefinite future. In many countries, there will be no respite from the persistent pressure of spending reductions and tax increases.

• Slow growing or declining worker living standards. As government spending rises faster than wages, increasing revenue needs could cause the living standards of working families to decline. Or conversely, if benefits are reduced, the living standards of dependent populations will decline.

• Chronic industrial over-capacity. In countries where depopulation is a problem, many industries that depend on domestic markets will find themselves in a permanent state of decline, with deflationary implications. For example, many Koreans will see the value of their homes decline throughout their lives, making it increasingly difficult to obtain long-term financing for real estate. Some version of this problem will affect a range of domestic markets, from universities to automobiles.

• Increased potential for international financial crisis. Many countries will see government costs rise faster than wages for the indefinite future under the existing social model, and it is likely that some — perhaps all — will run large, unsustainable budget deficits, year after year for decades until their debt becomes too risky for markets to bear. The falling creditworthiness of developed world governments could produce a global financial crisis of major proportions.

The Commission made 43 recommendations for addressing these challenges, with the caveat that not all of these ideas would be appropriate for every country. They include:

• Pre-fund pensions. Each generation should pay more of its own way through retirement. Greater individual self-sufficiency would, in turn, make it possible to reduce cash transfers to retirees.

• Immigration. High-skill immigrants can bolster competitiveness in high value-added occupations such as technology or business administration. Low skill immigrants can perform tasks like child and elder care, thereby freeing up highly educated mothers (for example) to pursue high value-added activities.

• Lengthen work lives. The employment of older populations can provide a one-off boost to GDP and tax revenues, while reducing benefit costs. This avenue of reform is appropriate to all aging societies, but has its limits when societies are depopulating. Once the labor force participation rate of older populations has reached its maximum, the labor force will begin declining again.

• Provide opportunities for women. Increasing women’s earning power and labor force participation can similarly provide a one-time boost to GDP and tax revenues.

• Facilitate the shift to “aging-society industries.” Moving capital and labor into “growth” areas of the economy is crucial, especially if these shifts also increase productivity.

• International dialogue. “Peer pressure” among aging societies can help to prevent domestic budget deficits from becoming global crises. Early warning systems and regular aging summits should become a fixture of global financial management.

Paul S. Hewitt served as director of the Commission on Global Aging. He is President of Americans for Generational Equity (www.age-usa.org).

Care Work in the EU: Support Measures in a Context of Demographic Change

Robert Anderson — Sat, 10 Oct 2009 13:09:05 +0000

1. Introduction

Demographic and labour market changes in Europe are creating new demands for care work, for both children and dependent adults. The well-established trend to ageing in all EU Member States, albeit at varying pace, will ultimately create larger numbers of people in need of long-term care.At the same time, the low fertility rates in most Member States have generated increasing demand for accessible, affordable and high-quality childcare. Meanwhile the increasing labour force participation of women, at both younger and older ages, is raising challenges to maintain the supply of care workers — both family carers and formally paid carers.

Across the EU most care has been organised and provided by family or informal networks; in most countries, it is only in recent decades that the social care workforce has become a key factor in social protection budgets — and the formal care sector has been financed and developed in very different ways in the different Member States. These trends and societal challenges have ignited a wide-ranging debate at European level on the care challenges associated with demographic change, but debates on the future of care have been muted in many Member States — perhaps especially where care is regarded as largely a family matter. Actions to support carers and to strengthen the care resource, both in the family and more formal arrangements, are developing unevenly across the EU countries.

2. Demographic Perspectives

The key demographic trends are captured in the recent population projections from Eurostat (2008); the dominant trend is one of ageing. The median age of the population of the EU27 is projected to rise from 40.4 years in 2008 to 47.9 years in 2060; the number of people aged 65 years and over is projected to nearly double from 84 million in 2008 to 151 million in 2060; and the corresponding number of people aged 80 years or over is expected to treble from 21.8 million to 61.4 million. These population changes are often presented in terms of ‘dependency ratios’ as in Figure 1.

Fig. 1: Projected age dependency ratios for selected years, EU27

Source: Eurostat, EUROPOP 2008 convergence scenario.

This clearly expresses development in numerical relations: whereas in 2008 in the EU27 there are 4 persons of working age (15-64 years) for every person aged 65 years or over, in 2060 the ratio is expected to be 2 to 1 — and in many countries this doubling of the old age dependency ratio will be in place by 2040. However, individual countries are affected differently and it is particularly the new Member States of Central and Eastern Europe that are expected to experience higher increases in old-age dependency ratios than in the EU27 as a whole. These are countries that, in general, appear particularly poorly prepared for rapidly increasing demands for long-term care (Österle and Meichenitsch, 2008).

The presentation of ‘dependency ratios’ is intended to give an indication of the level of support of the older population by the working population, but this may be misleading. Such figures may not represent the burden of ill-health or care needs of the older population or the numbers of economically active persons in the working age population; they certainly give no indication of the care provided by spouses and others in the older population or the caring capacity of informal networks and family in the younger age groups.

3. Policy Developments at European Union level

Family carers of dependent adults and older people have been almost invisible in policy documents of the European institutions until the last five years. A real upswing in attention to care workers has taken place with growing attention to the policy challenges of an ageing population and workforce, specifically in relation to the costs and coverage of long-term care for the dependent population. Now, reference, at least, to care workers and family carers is evident in documents related to policy areas of Employment, Social Protection and Equal Opportunities. Even so, the main Communication from the European Commission in October 2006, on ‘The demographic future of Europe’ makes no reference to care workers as such (an omission that was rectified when the Commissioner for Social Affairs launched this document).

The current policy debate on long-term care acknowledges the different contributions of the state, market, family and community in meeting care needs. The most recent review of developments in Social Protection in the EU (European Commission, 2008) pays explicit attention to the role, burdens and needs of informal caregivers. Specifically, this report highlights care workforce shortages and inadequacies in the training of both formal and informal carers. It argues, as so many articles do, that the increased participation of women in the formal labour market is posing a serious challenge to the sustainability of the informal provision of long-term care. While there is no doubt that this is an issue (taken up in a later section on working carers), it should also be acknowledged that historically only one woman in each family has typically borne the main responsibilities for care, and that there are still many women — and men — outside the labour market who are among the pool of potential carers. Nevertheless, it is clear that the probability that a person of working age will have family care responsibilities for adult relatives is increasing.

The Commission report argues that the main concern for policy-makers is recruiting and retaining an adequately qualified and skilled care workforce; training is presented as an issue for family carers as well as formally employed carers. Among measures to improve conditions for family carers, the report highlights incorporation of informal carers into social security schemes, protection of pensions and other social rights.

A second theme related to family carers who are also in employment relates to better reconciliation of work and care. A discussion paper from the Directorate-General for Employment (2008) asserts that ‘many women (and very few men) give up paid employment to provide care’, and this may cause financial hardship and social isolation. For most carers of working age the more common tension lies in trying to reconcile professional and care obligations. The authors of the EU discussion document see the way forward in terms of developing day-care centres for dependent older people, respite services and the introduction of new leave and working-time arrangements for informal carers; the social partners (organisations of employers and trade unions) are invited to develop this approach to enable workers to care for an elderly or dependent family member.

Care Work in the EU: Support Measures in a Context of Demographic Change: Paper for International Symposium on Social Support Measures for Care Work, Seoul, 9 October 2008.
Robert Anderson: European Foundation for the Improvement of Living and Working Conditions, Dublin.