Retirement timing in Europe: does sector make a difference?

This study uses Survey of Health, Ageing and Retirement in Europe data and event history analysis to determine the effect of sector of employment on retirement timing of older workers aged 50+ in 11 European countries. The findings suggest that older workers in the industrial and financial sectors retire earlier than those in the service sector.     

The operation and management of agency workers in conditions of vulnerability

This article focuses on the operation and management of agency labour by employers and observes that there are strong contradictions between the employers' stated reasons for using agency labour and the employment agencies' perceptions of why such labour is utilised. While discussing agency labour generally, the article also takes account of the position of migrant workers within the agency sector, since agencies have represented a significant route into employment for migrant labour. It draws primarily on 22 in‐depth interviews with employers and employment agencies mainly in the food processing, cleaning and care sectors. The research revealed that while some employers were using agency staff to cover for specific peaks in production, others had used it as an alternative method of dealing with vacancies that otherwise might have resulted in permanent employment.     

Flexibility,labour subcontracting and HRM in the construction industry in Singapore: can the system be refined?

Labour subcontracting is an important labour-use strategy in the construction industry. In their search for labour-market flexibility, employers in the construction industry in Singapore rely extensively on the Kepala (labour subcontracting) system. The Kepala system offers a 'convenient' way of managing operative (skilled, semi-skilled and unskilled) construction workers. Essentially, this paper discusses the merits and demerits of the Kepala system. It is argued that, although employers in the construction industry derive some strategic benefits from the use of labour subcontracting, on the whole, the system has some adverse consequences for workers, companies, the industry and HRM functions. But, in the absence of any better system that the employers can turn to, it is necessary for the Kepala system to be refined. Thus, it is suggested that the Japanese model of labour subcontracting offers lessons, but will require modifications and adaptations before being applied in Singapore.     

‘Good when they want to be’: migrant workers in the supermarket supply chain

Despite the increased attention paid to the role and effects of migrant labour in the contemporary economy, there has been insufficient attention to the role of employers and the employment relationship. Recent studies have highlighted distinctive labour power characteristics of new labour migrants from Central and Eastern Europe that make them ‘good workers’ in the eyes of employers. Drawing on multiple case studies across the supermarket supply chain, this article explores what kind of human resource migrant labour is perceived to be, particularly by employers, and what happens in practice as the dynamic tensions of the employment relationship unfolds in particular sector contexts. It argues that utilisation is conditioned more by the requirements of temporal flexibility – framed by the dynamics of employment within the supply chain – than any essential features of migrant labour power.     

Nothing ventured,nothing gained! How and under which conditions employers provide employability-enhancing practices to their older workers

Employability-enhancing practices usually refer to training or courses, but also practices directed towards older workers to sustain their work capability can be embraced by this term. In the context of an ageing population and workforce, older workers' labour market participation gains an increasingly important role. Therefore, the importance of employability-enhancing practices is noted as a solution to sustain their employment. In this study, we focus on employer-provided employability practices for older workers. We answer the following research question: which practices do employers use to enhance their older workers' employability and under which conditions are these practices adopted. Analyses on Dutch corporate data (N = 860) show that employers mainly provide employability-enhancing practices that are easily implemented and not expensive. This finding replicates prior research and clarifies that job redesign should be considered as a possibility to keep older workers in the labour market. Furthermore, our study shows that both organizational and labour market characteristics affect employers' decisions whether to provide employability-enhancing practices for their older workers. This suggests that policy measures might be necessary to assimilate investments in employability-enhancing practices across organizations.     

Understanding Ageing Public Sector Workforces: Demographic challenge or a consequence of public employment policy design?

In all OECD countries, populations and workforces are ageing, with public services generally being older than broader labour markets. Governments are concerned at the looming capacity crisis and identifying policy responses. However, they have generally identified the problem as a simple change in demographics. This article adds a new perspective to this policy debate. Using a study of an Australian state public service, it identifies an association between changes in public employment policies and changes in the workforce age profile. It suggests that current employment policies, which replaced the traditional focus on youth recruitment with a more open public sector labour market, have made it inevitable that public workforces would age and be older than the general labour market. Policy responses to the older public workforce need to go beyond demographic explanations, to accept the older public workforce as the new norm, and align public employment policies accordingly.     

Wages,employment, labour turnover and the accessibility of local labour markets

In this paper, we extend a dynamic efficiency wage model to the case of multiple local labour markets that interact through migration. Firms are concerned about turnover costs. The quitting behaviour of workers is a function of local labour market conditions, non-wage income and the costs and benefits of migration to other local labour markets. A synthetic micro sample of 20,302 observations from the 1986, 1991 and 1996 New Zealand Censuses of Population and Dwellings provides evidence supporting the theory. Across subgroups, the wages of workers with relatively inelastic local labour supply and/or lower geographical mobility are relatively more responsive to changes in the local employment rate. The evidence is consistent with the notion that local employers engage in monopsonistic competition with respect to the employment of such workers.     

Occupational pensions and job mobility in Britain: Estimation of a random-effects competing risks model

We analyse transitions between pensionable jobs, non-pensionable jobs, and other labour market states, using the 1988/9 UK Retirement Survey. We focus on the positive association between length of job tenure and pensionable status, allowing for the possibility that pension scheme members are less mobile than other workers because they have persistent unobserved characteristics that predispose them towards a high degree of security in both employment and retirement. We use a competing risks model with state-specific random effects. The model is estimated by simulated maximum likelihood.     

Organisational practices and the post‐retirement employment experience of older workers

This study compared people aged 50 to 65 who had retired and returned to work (n = 90), who remained in their career jobs (n = 198), and who retired and remained out of the workforce (n = 321). The significant differences between post‐retirement and career employment were associated with the HR practices within organisations and were not related to the characteristics of the organisations in which post‐retirement and career jobs were found. The HR practices were rated as especially important in influencing the decision of retirees to return to work. The findings suggest that people in post‐retirement jobs are drawn to organisations that provide HR practices tailored to the needs and desires of older workers. The results also indicate that if employers expect to address labour shortages by encouraging retirees back into the workforce, they are going to have to implement those HR practices that are important to this group.     

Transitions to self-employment at older ages: The role of wealth,health, health insurance and other factors

Relatively little research has been devoted to studying self-employment among older workers although they make up a disproportionate share of the self-employed workforce. This study uses 5 waves of panel data from the Health and Retirement Study to investigate the determinants of labor force transitions to self-employment at older ages. We estimate a multinomial logit model of transitions from wage and salary employment to self-employment, retirement or not working. Results are compared with those found in previous studies. New findings on the impact of health on transitions to self-employment are highlighted.     

Matching processes in the labour market an econometric study

This paper presents empirical results on matching in the labour market in Marseilles (France). Using a sample of meetings between employers and workers organized by a local employment office, we infer from estimation results that selection among applicants is on the basis of their level of education. The strength of this selection bias is substantially caused by the poor quality of the screening performed by the employment office. Employers appear also to discriminate against the youngest applicants, the long-term unemployed and applicants of North-African extraction. These effects are alleviated when employers face a labour supply constraint in the labour market.     

Government Employment and Wages and Labour Market Performance

Government wage, benefit, and employment decisions are not taken on a profit-maximizing basis, and have a substantial impact on aggregate labour market performance and unemployment. In a two-sector labour market model with free mobility of labour, an increase in government wages or benefits reduces private sector employment, and government employment is not an effective counter-cyclical instrument. Empirical tests for Greece confirm that the expansion of the public sector in the 1980s contributed to the deterioration of labour market performance.     

Employers' attitudes,practices and policies towards older workers

Despite policy emphasis on the importance of older workers (i.e. those aged 50 and above) to current and future labour markets, relatively little is known about the ways in which employers' attitudes, policies and practices influence their recruitment and retention. Drawing upon previous work by Taylor and Walker, this article reports qualitative research among employers across Scotland, which sought to investigate further the relationships between employers' policies, practices and attitudes towards older workers. The findings indicate a complex set of relationships, and challenge the simplistic causal link between attitudes and practice. The conclusions discuss the implications of these findings for the future employment of older workers, and assess the extent to which the forthcoming age discrimination legislation in the UK is likely to tackle discriminatory attitudes, practices and policies.     

Ageing and employability. Evidence from Belgian firm-level data

The Belgian population is ageing due to demographic changes, so does the workforce of firms active in the country. Such a trend is likely to remain for the foreseeable future. And it will be reinforced by the willingness of public authorities to expand employment among individuals aged 50 or more. But are older workers employable? The answer depends to a large extent on the gap between older workers’ productivity and their cost to employers. To address this question we use a production function that is modified to reflect the heterogeneity of labour with workers of different age potentially diverging in terms of marginal products. Using unique firm-level panel data we produce robust evidence on the causal effect of ageing on productivity (value added) and labour costs. We take advantage of the panel structure of data and resort to first-differences to deal with a potential time-invariant heterogeneity bias. Moreover, inspired by recent developments in the production function estimation literature, we also address the risk of simultaneity bias (endogeneity of firm’s age-mix choices in the short run) using (1) the structural approach suggested by Ackerberg et al. Structural identification of production functions. Department of Economics, UCLA, (2006), (2) alongside more traditional system-GMM methods (Blundell and Bond in J Econom 87:115–143, 1998) where lagged values of labour inputs are used as instruments. Our results indicate a negative impact of larger shares of older workers on productivity that is not compensated by lower labour costs, resulting in a lower productivity-labour costs gap. An increment of 10 %-points of their share causes a 1.3–2.8 % contraction of this gap. We conduct several robustness checks that largely confirm this result. This is not good news for older individuals’ employability and calls for interventions in the Belgian private economy aimed at combating the decline of productivity with age and/or better adapting labour costs to age-productivity profiles.     

What is the most flexible component of wage bill adjustment? Evidence from Belgium

This paper decomposes wage bill changes at the firm level into components due to wage changes, and components due to flows of employment. It relies on an administrative matched employer–employee dataset of individual earnings merged with firms' annual accounts for Belgium over the period 1997–2001. The results are in line with what one would expect in a downward wage rigidity environment. On average, wage bill contractions result essentially from employment cuts in spite of wage increases. Wage growth of job stayers is moderated but positive; and wages of entrants compared with those of incumbents are no lower. The labour force cuts are achieved through both reduced entries and increased exits, due to more layoffs, especially in smaller firms, and wider use of early retirement, especially in manufacturing. In addition, the paper points out the role of overtime hours, temporary unemployment and interim workers in adapting hours worked to economic circumstances.     

FLEXIBLE RETIREMENT

Flexible retirement – that is, the opportunity to choose one's own personal retirement age – is a hedge against pension risk and provides insurance to workers facing health or productivity shocks. Flexible retirement and flexible pension schemes are in practice closely linked because of imperfect capital markets and institutional restrictions. I discuss three necessary conditions to provide insurance through flexible retirement. First, it should be possible to adjust the pension starting date at limited cost. This condition is gradually being fulfilled, as many countries are moving toward more actuarially neutral pension schemes. Second, individuals should be willing to adjust their labor supply in case of a wealth shock. This condition seems largely fulfilled, although the available empirical evidence suggests that the ‘standard retirement age’ is at least as important as the income effect. Third, the labor market should be able to deal with flexible individual retirement decisions. This condition is gaining importance, but has not yet received much attention in the literature. Institutions often hamper employment past the ‘standard retirement age’. Moreover, the hiring rates of older workers are low and their unemployment duration is high. Institutional reforms facilitating flexible retirement opportunities are desirable from an insurance perspective.     

Public–private sector wage differentials and the business cycle

This paper uses microeconomic data for the period from 1990 to 2004 to examine the relationship between public–private sector wage differentials and labour market conditions in Finland. The results show that the public sector wage premium is strongly counter-cyclical. On average, a 10 percent increase in the local unemployment rate increases the public–private sector wage gap by one percent. Separate analyses by government sector and quantiles of the distribution of wages reveal that it is local government workers and those working at lower skill levels who benefit more from increasing unemployment rate. The paper also exploits the longitudinal structure of the data to examine whether the results are constant over time. These results indicate that the cyclical pattern primarily emerges in years with deteriorated labour markets.     

The Labour Market Effects of Increases in Social Insurance Premium: Evidence from Japan

Exploiting heterogeneous variations in labour cost increases due to Japan's 2003 social insurance premium reform as a natural experiment, we estimate the impacts of the increased social insurance premiums on employment, working hours and payroll costs. Using the difference‐in‐differences method with establishment fixed effects, we find that firms reduce the number of employees and increase average annual earnings from longer working hours in response to an exogenous increase in labour costs without productivity gains. Firms manage to pay for this increase in the average wage paid to the remaining workers by reducing the number of employees to keep total payroll costs unchanged. In contrast, since social insurance premiums are shared equally between employees and employers, firms pay the remaining half premiums that they are imposed with. Sub‐sample analyses show that firms adhering to a labour hoarding policy did fire many workers taking advantage of the 2003 reform. This may indicate that the reform provided a good excuse to cut employment in firms that had been forced to comply with a labour hoarding policy even in an over‐employment situation, which is more likely in sectors and countries where dismissals are rigorously regulated.     

Redefining retirement: age equality and the rise of performance management

How do individuals retire when there is no default retirement age? The changes to the retirement regulations were aimed at extending individual choice, but with the use of performance management, employers have a new tool with which to control the time and manner of retirement. Employees who fail to perform as required are now to be ‘managed out’. Therefore, retirement needs to be treated as an outcome of workplace employment relations with consequences for all age groups.     

Pensions, non-discrimination policies, and the employment of older workers

This paper analyzes firms' decisions to hire older workers. We model, the role of pensions in back-loading pay for specifically trained workers. We then evaluate the effects, of imposing age discrimination rules and non-discriminatory fringe benefit rules, and analyze the consequences for the firm's decision to hire older versus younger individuals. The model predicts that defined benefit pension plans deter the hiring of older workers, but only if hired for entry level position. The reason is f hat the wages of this group cannot be lowered enough to pay for the benefits. Data from a new survey of employers are used to test this hypothesis. The findings show that a more generous defined benefit pension plan reduces employment prospects for older, entry level workers. Employers offering defined benefit pension, plans employ older workers, but tend not to hire them into entry level jobs.