Employment of Seniors: Manual of Incentives and Conditions For Longer Employment. Photo: Digital Vision. PARIS, France (Seniorscopie), December 3, 2007:
Only 38% of French aged 55 to 64 years are at work against 69% of Swedes of the same age. Result: Life expectancy of healthy persons increases but it will not stop declining if relevant economic measures are not taken.
A symposium organised on November 29 by the Council for Reorientation Of The Retired, took stock of the situation.
Experts from France's Bureau of Economic Outlook presented a report on European experiments that have improved the situation. These included Denmark, Finland, the Netherlands, United Kingdom and Sweden. Continuing education, career management and economic growth are the basics for their success, says the Manual.
Compensation of salaried employees in Finland who postpone their retirement has been increased substantially, as in Sweden. In France, incentives remain modest, the increment in compensation is not attractive enough, and the advantage of post retirement employment is a complex exercise which, in effect, is financially subject to rules.
In Finland, managements and doctors do not aim at systematically sending people with health problems into retirement. Companies are, in effect, encouraged to improve working conditions. Businesses are penalized financially for terminating services of their employees. The official retirement age has been extended from 63 to 68 years. In Denmark, the goal is to extend the age of retirement so that each individual benefits from an average of 19.5 years in retirement. The Dutch government is removing restrictions on seeking job opportunities. A promotion campaign has been launched to evaluate the work of seniors.
Economic expansion is the key to employment of older people because it creates full employment for all. The liberal British liberal model promotes flexibility in creating jobs but puts the burden on the employee. At times it combines employment and pension to overcome poverty. The Scandinavian model is based on the training and career management for maintaining employability of the employee. The German, Italian and French models are failing because, with their state of economy, they turn to assistance rather than on return to work. They promote unemployment and exclusion from the work force.
Extension of Period of Contribution to Pension. The November 2007 report of the Council for Revision of Pension underscores the sharp deterioration of pension systems by 2020 in spite of extension of contribution period of all categories of employees and bureacrats to 40 years and then, to special schemes.
The 2008 reform foresees an extension of contribution period to 41 years, at the rate of one quarter per year.
Continuing education. Employment rates for seniors are 69.5% in Sweden, 59.8% in Denmark, 56.8% in UK and 52.7% in Finland. These countries have moved from a "culture of early retirement to active aging, unlike countries of the Continent, particularly Germany and France," according to Gerard Cornilleau, an economist at the OFCE. They have capitalized on continuing education.
In France, access to continuing training throughout the career is limited to about 30% while it is around 70% in Denmark.
Denmark, Netherlands, Finland, Sweden and the UK are countries where the percentage of individuals who have been trained recently is double that of the average of the former 15-member Europe.
Incentives to employers. In Sweden, employment of older people is encouraged and grants are awarded to those hiring seniors. In the Netherlands, tax exemptions are given to seniors continuing to work as well to employers of seniors.
Mobility. Linc Vreven, one of the leaders of the American Association of Retired People, notes that to keep older workers in employment and to benefit from the expertise of seniors, for some time now the first American pharmacy chain, CVS, offers its older employees the choice to work in two different States in the year, and allows them to spend winter in the South if they wish.
Lower Retirement. United Kingdom and Scandinavian countries have managed to keep those over 50 years of age longer in the work force through continuing education, part-time employment and lower pension, according to OFCE experts.
"Pension in Denmark has always been kept low, which leads Danes to delay retirement to maintain their standard of living," says Henri Sternyniak, an economist at the OFCE.
"Sometimes the over-60 in the UK are compelled to combine a small pension and a small employment, which can be physically painful," he says.
France may be forced to rely on the amount of pension, to make it more attractive for seniors to remain active. The unions refuse that. Such a reform would not find favour with those worried about purchasing power.
Pre-retirement Taxation. The rate of employment rate is less than 40% for those aged 55-64, and France is below the European average (42.5%) and far below the EC target of 50% for 2010. The government has made keeping the elderly in the labor market one of its priorities, but for the moment it is content with merely increasing tax on companies promoting early retirement, and that affects corporate accounts and results. But there are still about 700,000 seniors between 55 and 59 who enjoy pre-retirement benefits, like exemption from seeking employment and second an early retirement from a long career, and they make 12% of this age group.
Part time. "In the UK, the rate of seniors in part-time employment stands at 31.7%, nearly 10 percentage points higher than for the rest of the population," says Cornilleau.
Overview. Progress made between 2000 and 2005 in employment of older workers in France (increase in employment of the 55-64 year olds, of 9 points according to Insee, from 29 to 38%) was largely a result of demographic structure.
Currently the baby boomers generation is reaching the age of 55 years, and they are more in number than those earlier in employment. It is not a real upturn due to public policy or a change of mentality of the organizers.
By Jean-Yves Ruaux
Translated By Google
Edited by Ravissant
© Bayard 2007
