Ageing and employment policies: Ireland John Martin 1 Director for Employment, Labour and Social Affairs, OECD FÁS Annual Labour Market Conference, Dublin, 5 December 2005
OECD has carried out a major study of Ageing and Employment Policies 21 separate country reports: Identifying work disincentives and barriers to employment of older people Identifying examples of good practices Setting out policy recommendations A synthesis report was presented to a High-Level Policy Forum in Brussels, 17-18 October 2005 2 www.oecd.org/olderworkersforum
Outline of the presentation Key problems and challenges facing Ireland Barriers to employment of older workers Recommendations for further reform 3
Key problems and challenges facing Ireland 4
The Irish population is relatively young at present, but is expected to age rapidly after 2025 Population aged 65+ / Working-age population (20-64) 70 60 50 40 Italy Ireland EU-19 UK OECD Canada US 30 5 20 10 2000 2025 2050
Which will slow labour force growth labour shortages, slower economic growth and increased strains on public finances In the near term, these challenges are less severe for Ireland than for many other OECD countries but watch out for the future! Ireland will need to mobilise more fully its potential labour supply Immigration can make a contribution 6 As well as encouraging greater labour market attachment among women (as recommended in the OECD s report on Babies and Bosses)
But a key policy response will be to encourage higher labour force participation at older ages Labour force in millions various participation rate scenarios 3.0 2.6 Max All 3.0 2.6 2.2 1.8 Max 50+ Constant 2.2 1.8 7 1.4 1.4 1.0 1.0 1950 1970 1990 2010 2030 2050
8 and there is scope to do this Labour force participation rates for older workers aged 50-64, 2004 (%) 100 90 80 Iceland Sweden New Zealand Norway Switzerland Denmark Japan United States Canada United Kingdom Finland Korea Australia OECD Portugal Czech Rep. Mexico Germany France Ireland Netherlands EU19 70 60 50 40 30 20 10 0 58.7 Slovak Rep. Spain Greece Austria Luxembourg Hungary Poland Belgium Italy Turkey
Older workers and barriers to employment 9
Good news: little incentive to retire before 65 through the public pension system Not so good news: there are other routes out of the labour market, especially for older men Stock of men on Unemployment Benefit/Assistance or PRETA, 2004 (% of all men) 16 14 UA + UB PRETA 12 11.6 10 9.1 8 3.0 6.4 6 10 4 2 6.1 5.2 0 55-59 60-64
These include the use of disability benefits 25 Stock of Disability/Invalidity beneficiaries, 2003 (% of population) 20 15 10 22.6 11 5 0 14.4 10.3 7.1 3.0 3.8 4.7 5.7 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64
Barriers to the employment and retention of older workers Some evidence of age stereotypes among employers Awareness of rights and responsibilities under the equality law is low Persistence of mandatory retirement Some resistance to introduce more flexible work arrangements for older workers 12
13 Weak employability is also an issue Training participation declines with age but is relatively low for both older and younger workers % of employees who received training during the previous 4 weeks, 2004 Sweden Switzerland Denmark Finland United Kingdom Iceland Norway Netherlands Austria Belgium Luxembourg Ireland France Italy Czech Republic Slovak Republic Poland Germany Hungary Portugal Spain Greece 35 30 25 20 15 10 5 0 50-64 25-49 35 30 25 20 15 10 5 0
Labour market policies provide relatively little support to help older workers find a job 14 18 16 14 12 10 8 6 4 2 0 8.7 CE Participants in ALMPs by gender and age, 2004 17.3 CE Percentages of non-employed 6.2 6.5 6.5 CE 25-44 45-49 50-64 25-44 45-49 50-64 Men Other Community Employment (CE) Training CE CE Women 2.2 CE
Recommendations for reform 15
Tackling work disincentives Increase incentives to retire later In exchange for more intensive assistance Strengthen job-search requirements for older unemployed Abolish the Pre-Retirement Allowance 16 Shift the focus of disability benefits to remaining work capacity
Tackling barriers to hiring and retention Improve awareness of rights and responsibilities with respect to age-discrimination legislation Abolish mandatory retirement Encourage more gradual retirement arrangements 17
Improving employability Move the lifelong learning agenda forward Improve skills and training among all workers by making better use of the National Training Fund Make employment services more effective for older job seekers 18 Develop guidelines for improving working conditions for older workers Strengthen evaluation of what works and for whom
The Bottom line Ireland is well placed to meet the challenges of ageing... but needs to avoid complacency The reform measures presented will help older workers CARRY ON Working 19 Importance of the Social Partnership process engaging actively with the challenges