Institut für Gerontologie an der TU Dortmund Prof. Dr. Gerhard Naegele/Dr. Jürgen Bauknecht German...

Institut für Gerontologie an der TU Dortmund

Prof. Dr. Gerhard Naegele/Dr. Jürgen Bauknecht

German `s way to raise the employment rates of older workers and to prolong working lives – an attempt to understand better retirement behaviour and attitudes

IAGG-ER 8th Congress, Symposium on “Political Answers to demographic questions in different welfare regimes – Delaying labour market exit”

Dublin, Ireland, April 23, 2015


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Introduction (1)

Since the beginning of the new century been remarkable increase in the official employment rate of older workers

There are different explanations which in practice act together: demographic composition of the workforce, new retirement/pension regulations, financial incentives, changed and/or improved employability of the younger cohorts of o.ws. (positive cohort effects), women staying longer in working life, improved working conditions, more corporate age management , increase of precarious jobs

However which factor is counting most ?

Among others with distinctive higher employment rates Higher qualified (mainly male) workers (among them primarily members of white collar occupational groups) Older workers with tailor-made (needed) qualifications Self employed (among them many with an academic background) No older (previously) unemployed


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Key actor groups and strategies in Germany`s retirement and older worker policies

National/Federal/state policies

Social partners activities

Individualstrategies

Policy fields and main groupsof actors

Corporatemeasures


4

Employment Rate 2000 and 2011 (Age and Gender)

Male Female

Age

Employment rates Germany (2000 and 2011, all age groups and gender)

Source: Federal Statistical Office; calculations: BiB


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Labour force participation of older workers (2002 and 2012, 55-59, 60-65, age and gender)

Total 2002 Total 2012 Male 2002 Male 2012 Female 2002 Female 20120

10

20

30

40

50

60

70

80

90

55 to 59

60 to 64

Source: own diagram based on Mikrozensus. For 2002: Results of reference week april; for 2012: annual average


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Male Employment Rates and formal educational status(2004 - 2013, age and gender)

2004 2005 2006 2007 2008 2009 2010 2011 2012 20130.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

Male Less than primary, primary and lower secondary (ISCED levels 0-2)

Male Upper secondary and post-sec-ondary non-tertiary (ISCED levels 3 and 4)

Male Short-cycle tertiary, bachelor or equivalent, master or equivalent and doc-toral or equivalent (ISCED levels 5-8)

Age: 55 to 59

Gender: Male

Formal Education: ISCED11

Source: own diagram, Eurostat


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Conceptionalization of “retirement in Germany

In the past in Germany the socio-political discussions about retirement was dominated by economists, pension and labour market experts

In consequence, retirement has primarily been treated from both an economic as well as from the perspective to regulate the budgets of the social security, particularly the public pension schemes

This approach mirrors a narrow understanding of retirement and in consequence has led to “narrow” policy answers with limited success

Socio gerontologists favor an interdisciplinary approach looking behind the contextual framework conditions and asking for push and pull factors particularly concerning the working and/or private living conditions of the retiring people/retirees (e.g. work-life-balance)


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Retirement in the view of key actor groups (1)

Policy makers, retirement as …

Instrument to regulate labour markets Instrument to shape the generational contract Instrument to regulate social security expenditures

Economy/corporations, retirement as …

Instrument to regulate manpower/to adapt personnel policy needs Point of reference for own in-company retirement-ages Instrument to regulate personnel costs


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Retirement in the view of key actor groups (2) Trade unions, retirement as …

Instrument to humanize labour world Guarantor of an old-age income free from paid work

Older workers, retirement as …

Structural and expected event in a normal working life-course Changing the social status (“status passage”) Point of reference for further planning individual life courses (“late

freedom”; Rosenmayr) Beginning of a (“well earned”) phase of life with less obligations No more need to work for money in order to reach one`s own self

subsistence Retirement as a critical life event and as a developmental task


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I National policies (1)

Closing respectively impeding early retirement exit routes

Impeding the access to invalidity pensions (1996, 2001) Reduction of early-invalid pensions through actuarial cuts (2007) Stop of the partial retirement scheme (which was mainly used as

“block-model”)

Labour market approaches (among others)

Legally opposing age discrimination in employment (2006) Reduction of unemployment benefits in case of early exit (2005) Activating and supportive/counselling programs for older job seekers Wage-subsidies Awareness campaigns favoring older job seekers/workers Promoting further vocational training


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I National policies (2) Postponing official retirement age (“Rente mit 67”) (2007)

Gradually increasing of the legal retirement age from 65 to 67 (2029) (monthly and later in monthly steps for each consecutive year)

Early retirement still possible however with pension reductions (actuarial cuts by 0.3 % per month retiring earlier up to 18 % at max.)

currently more than 50 % of all new pensions hit by actuarial cuts pensions reduced by 18 % for one third of the early retirees concerned

so far in average the retirement decision of older workers in

Germany could be postponed by around 1 year

However: July 2014: Softening the “Rente mit 67” by introducing a new “Rente mit 63” for long-term insured

Employees with a contribution period of 45 years allowed to draw pensions at the age of 63 without any reductions (up to 400.000 user)


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Affected cohorts by „Rente mit 67“

Source: Own presentation (Data taken from: R+V Versicherung (2014). Altersvorsorge. Gesetzliche Rente. URL: http://www.ruv.de/de/r_v_ratgeber/altersvorsorge/gesetzliche_rente/2_rente_mit_67.jsp (Last access: 17/10/2014)


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Indexing retirement age in line with further life expectency ?

Life-expectancy indexed retirement policies would lead to a further deepening in retirement-related social inequalities

taking into account that both the rising further-life expectancy as well as the gained years in health state is not at all true for members of the lower social classes

In consequence lower social class members would be discriminated threefold:

(1) eventually even less years in work through needing to retire earlier (2) thus even more pension reductions and lower standard of living

although (3) their pension contributions in former (shorter) active working life

in a pay-as-go-system helps the “winners” from the higher socio-economic groups to realize even more a higher standard of living


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II.1 The role of the trade unions

They needed a much longer time in accepting the shift of paradigm

Many still opposing “Rente mit 67” as well as among those who helped “Rente mit 63” for long-term insured to come into force

One of the recently introduced union-initiatives is to promote employment prospects of o.ws. by “collective bargaining of demographic change” (e.g. Chemical Industry, Iron and Steel Industry. German Rail, Company agreements)

The issue of social inequality arises because collective agreements only cover certain sectors of industry and very often do not reach small and medium sized companies


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II.2 The role of employers

Until turn of the century primarily favoring early retirement

Today a more positive perception of age as factor of production to be noticed

Mainly business reasons for introducing corporate age management (in particular qualified labour shortage, exit of baby boomers)

However: Age management not widespread,

So far only a small number of older workers is profiting (mainly in larger (“unionized”) companies), distribution mirrors social inequalities

Research confirms an positive impact of age management on both work satisfaction as well as on occupational productivity of o.ws.


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Corporate age-management measures from business´ and employee´s perspective

... is practiced in ….

% of the company... is desired by …. %

of older workers

Special training programs for o.ws. 13,5 69,6Age diverse teams 69,5 79,9Involvement in continuing education 58,3 81,5

In-house job-rotation 34,1 34,9

assignment as coach, trainer, consultant 37,2 65,9part-time models 57 61,4Selective assignment of older employees in development projects and improvements 20,6 73,9

Reduction of labour requirements 22,6 64,2

Ergonomic design of work environment 37,7 84,2Health care and promotion 40,5 79,1Lifetime working accounts 17,0 73,5


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II.3 Collective agreement on demographic change in the Iron and Steel Industry (2012)

Aims Create age oriented working conditions Promote health and well-being of employees Support and improve employability Provide options for early exit and/or a smooth transition to retirement Rejuvenate the workforce

Measures/Instruments Obligatory analysis of age structure (in cooperation with works

council) Implement respective measures (e.g. health promotion, training, peak

load reduction, age mixed teams, organisation of working time, redeployment)

Initiative for early exit/smooth transition to retirement Fund “Demographic change” Evaluation


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II.3 Evaluation of the collective agreement in the Iron and Steel Industry by SfS/FfG (2012/13) – first results

Collective agreements accepted as one (of more) corporate answers to the demographic pressure

Collective agreements seen as “growing” agreements which have to be developed mutually between work councils and management

Health – related programmes mainly aiming at individual health training and less at in-company health-protection

So far hardly any initiative concerning age-related re-structuring of workplaces and working time in order to reduce labour requirements

Steel-typical workplaces less qualified for new forms of age diversity


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III.1 Older workers - the prime key-actor group (1)

Many positive cohort effects favour employment in later life (“age-work-paradoxon”/Walker)

However differentiation of old age is also true for older workers

Differenciations after problem-groups and disadvantages necessary

A life-cycle/course perspective is necessary for both to understand older workers better as well as to improve their employability (e.g. life-cycle oriented personnel poilicies”)

Socio gerontologists recommend the broader concepts of workability and employability as points of departure for corporate measures aiming at prolonging working lives


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III. 2 5 worker`s life cycles relevant for corporate „lifecycle oriented personnel policies“

Occupational lifecycle (from choice of occupation to retirement) Corporate lifecycle (relating to the time from joining to leaving a

company) Job-related lifecycle (from taking up to leaving a position) Family lifecycle (from parenting to care-giving to parents/dependants) Biosocial lifecycle (orientation on “age-related” changes in

performance)

Source: 6th Federal report on senior citizens in Germany 2010


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III.3 Older workers - the prime key-actor group (2) Compared to previous cohorts – today`s older/ageing workers

Expect to need to work longer but the majority does not want Only about half of them is optimistic to reach 67 in work This is confirmed by official retirement data Are prepared to invest into their own employability Have clear ideas which support is needed to work longer Regard the employers as primarily responsible to help them doing so Regard job satisfaction of one of the major drivers to work longer Focus increasingly the individual work-life-balance (particularly

women) Regard family biography and generational relations and obligations as

important retirement decisions Only a minority would like to work longer (after official retirement

age), mainly due to intrinsic reasons, less to financial reasons (however future cohorts ?)


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Interim conclusions – the case Germany

“Shift of paradigm” partly realized (e.g. increasing activity rates) But not widespread in German companies (as measured by age-

management, collective agreements) A interdisciplinary retirement/working-longer perspective is missing Pure pension policies without resounding success if not supported by

in-corporate measures, LLL, enabling and motivating strategies … Working longer and working beyond retirement socially selective Many “problem-groups” not able to meet the policy expectations,

(still) need to retire earlier and thus are “punished” by pension cuts The unemployment pathway into retirement still widespread In all the “shift of paradigm” in retirement and o.w. policies in

Germany are marked by (old) social inequalities (“Matthäus-principle”) The challenge of motivating o.ws. to work longer remains An overarching, comprehensive enabling-strategy is needed MOPACT looks after “social innovative” solutions (e.g. co-ordinated

measures, “policy-mix”, life-course orientation”)


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Thank you for your attention!

Prof. Dr. Gerhard Naegele/Dr. Jürgen BauknechtInstitute of Gerontology at TU DortmundEvinger Platz 1344339 DortmundGermanyfon +49 (0) 231 - 72 84 88 – 10fax +49 (0) 231 - 72 84 88 – 55web www.ffg.uni-dortmund.de

http://www.ffg.uni-dortmund.de/

Institut für Gerontologie an der TU Dortmund Prof. Dr. Gerhard Naegele/Dr. Jürgen Bauknecht German...

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