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Trends result of not being liable to pay contributions, farmers receive welfare pensions from OGA, the agricultural community fund. The minimum pension administered by OGA in 2002 amounted to 53.201 drs (€156) or just 41% of the minimum pension issued by IKA (the urban fund). Although OGA’s pensions have been improving markedly since 1993, they are still at levels grossly inadequate for sustaining a decent living standard. Thus it would appear that the increased participation rate of older people in rural areas recorded earlier on, is attributed to the lack of attractive retirement and income options, and is thus involuntary. Third, partly because of demographic ageing, there is clearly a financial sustainability problem. Public pensions expenditure is projected to rise steeply, from 12.4% of GDP in 2000, to 17.3% in 2030 and from there on to 22.6% in 2050, the largest projected increase among EU Member States. Addressing this financial challenge will require a huge effort and, inter alia, a broad social consensus among the dominant socio-political actors. General retirement limits are set at 65 for men and 60 for women and, for those who began working after 1993, at 65 for both men and women. According to the Greek Report on Pension Strategy (2002), however, “the complexity of the legislative framework makes these general limits as something of purely theoretical significance”. It is thought that the structure of benefits is such that usually individuals decide to retire officially as early as possible and then continue to work unofficially (while drawing a pension) 9 . This observation receives some support from the examination of the age distribution of retired persons in 1998. According to information drawn from the LFS, a respectable part of males (252,225 persons, or 26.1% of the total) were already in retirement prior to reaching the general retirement age (65). The corresponding estimate for women was smaller (79,893 persons, 11.5% of the total) yet significant. In general, the effective (rather than the statutory) retirement age Table 1: Estimates of the average age of transition to inactivity for Greece, 1950-2000 Table 2: Transition probabilities from unemployment, 1997/1998 appears to have declined drastically in Greece over the last fifty years or so. According to Table 1, the average age of transition to inactivity for males decreased from 68.2 years in 1950 to 61.9 years in 2000, a drop of 6.3 years. Similarly, the average age for females dropped from 64.3 to 58.5 years over the same time period. It is certainly impressive that the improvements in health and in life expectancy, which occurred during the last decades, were accompanied by a shortening of working lives. With respect to premature retirement and the minimum retirement age, current social security legislation foresees a gradual increase in the age limits for large categories of persons. These increases began to come into effect in 1998 and will continue to be implemented up until 200710 . Changes are meant to bring the age limits of persons working in sectors with lower retirement ages (public sector, “Special funds”) in line with those of IKA. Certain measures have also been taken since 1998, in order to limit the incentives for early transition to inactivity. Disability pensions constitute another option for early retirement. According to the Social Budget, in 1998 there were 340,026 persons receiving invalidity pensions and 100,613 disabled persons receiving welfare benefits. The majority of these pensions were issued by the two largest Social Insurance Funds, IKA and OGA. It is estimated that approximately half of the invalidity pensioners were of working-age (i.e. 15-64 years of age) and that of this sub-total, a sizeable proportion (as much as 40%) was working at least occasionally11 . The granting of invalidity pensions has often been connected with “social criteria” in the past, and this explains the large proportion of disability pensions among the total. It is believed, however, that during the last decade or so, and especially since the regulations introduced by Law 1902/1990 which tightened eligibility criteria, disability pensions have ceased to constitute a favourable option for retirement and the granting of new disability 1950 1960 1970 1980 1990 1995 2000/200 Change 2000/1950(in years) Males 68.2 66.5 65.6 64.9 62.3 62.3 61.9 6.3 Females 64.3 64.4 64.3 62.5 60.6 60.3 58.5 5.8 Source: Blondal S. and S. Scarpetta (1998): “The retirement decision in OECD countries”, OECD, Economic Department Working Paper, Number 202. Also, Scherer, P. (2002): “Age of withdrawal from the Labour Force in OECD Countries”, OECD, Labour Market and Social Policy Occasional Papers No 49. From unemployment to unemployment From unemployment to inactivity From unemployment to employment All ages (15+) M 0.6524 0.1024 0.2452 F 0.5806 0.0819 0.3375 50-54 M 0.7880 0.0610 0.1510 F 0.7552 0.0249 0.2199 55-59 M 0.7259 0.0969 0.1771 F 0.6658 0.1028 0.2313 60-64 M 0.8597 0.1403 0.0000 F 0.8075 0.1925 0.0000 Source: NSSG, LFS and author’s calculations 9 For an account of early retirement options for various categories of workers, see: Fakiolas, R. (1996): “Effectiveness in work and ageing”, Proceedings of the Conference on Ageing and Society, EKKE, 1996. 11 See: Greek Report of Pension Strategy, p. 25. 11 See: Karantinos, D. (2001): “The Employment Status of the Disabled in Greece”, Report prepared for DG EMPL. 104 Spring 2003 | European Employment Observatory Review
pensions retracted to normal levels (i.e. around 15% of all new pensions in 2000, against 30% in 1989). Along with disability and health problems, unemployment may constitute another pathway leading to effective retirement and eventual withdrawal from the labour market. According to Table 2, once unemployed, the chances of finding another job, diminish with age. In 1998, only 15,10% of men aged 50-54, unemployed a year before, had found a job in the succeeding year, compared with 24.52% which is the estimated average for all age cohorts (15+). Of the remaining population, some 78.80% remained unemployed and 6.10% passed into inactivity. The proportion of the unemployed, one year before drifting into inactivity in the succeeding year, increases with age. For men, it rises from just under 10% for the 55-59 age group, to 14.03% for the 60-64 age cohort. Similarly, the equivalent proportion for women rises from 2.49% for the 50-54 age group to 10.28% in the next age group and, finally, to 19.25% for those in the last age bracket (60-64 years of age). In relation to the scale of the demographic ageing problem, very little has been done so far to address the issue. Most of the training and employment programmes benefiting older workers are designed to benefit a broader age group (45-64 years of age). This is the case of the integrated programmes for unemployed persons, which include actions for pre-training, vocational training, job-search assistance and accompanying support services (NAP 2002). Older workers can also benefit from the various in-house training schemes offered to workers of private firms. The only scheme currently in operation, targeting older workers exclusively, is a wage subsidy scheme financed by the Social Partners Fund, LAEK (Account for Employment and Vocational Training). Under this scheme, enterprises of the private and the broader public sector are subsidised, in order to employ unemployed persons who are close to retirement age (i.e., five years short of retirement). The period of subsidy ranges from 1 to 60 months and the amount of subsidy for each day of full employment is 17.61 euro for the first 24 months and 20.54 euro for the next 36 months. For part-timers, the subsidy is set at 10.27 euro and 11.74 euro, accordingly. It should be noted that none of the above measures has been evaluated recently and hence their impact upon older workers employment rates remain to a large extent, unknown. The reasons behind the apparent lack of interest on problems associated with ageing may be attributed to the existence of ample possibilities for early retirement and also to the low unemployment rate facing older workers. Early retirement by large numbers has prevented the problem of an ageing workforce from coming to the forefront. Besides, partly because of the high compensation requirements for salaried employees with many years of service, dismissal of older workers is not as frequent as in other EU Member States, a fact contributing to low unemployment rates among older workers12 . 4. Concluding remarks Demographic ageing, due to a fall in fertility and a fall in mortality, appears to affect Greece to a larger extent than most other EU Member States. Taking 2000 as a base year, the old-age dependency ratio (i.e. population aged 65 and over as a percentage of the working-age population, 15-64) is estimated at 25.6 and is projected to climb to 29.2 by 2010. In comparison, the equivalent estimates for EU-15 are 24 and 27, respectively. Greece is one of the three Member States (the others being Italy and Germany), which are 12 See: Trends, No 33, Winter 1999. Spring 2003 | European Employment Observatory Review 105 Trends expected to have an old-age dependency ratio of almost 30% by 2010. Rapid demographic ageing has raised concerns on the viability of the pension system and has brought to the forefront the need to cater for the elderly to a greater extent than in the past. Fears are often expressed that, unless the previously pursued policy of fostering early retirement is reversed, it will be hard to maintain sustainability. As a policy, early retirement was popular in the 1980s and 1990s, when it was viewed as a means of paving the way for the younger generations. This situation resulted in great numbers of healthy, prematurely retired workers, many of whom continued working in the informal sector of the economy. Although, in theory, employment of the retired workers in the formal sector of the economy is not prohibited by law, in practice the various insurance funds impose restrictions, severely limiting incentives to do so. Fears and concerns about the demographic situation are commonly acknowledged and frequently mentioned in both academic and political discussions in Greece. Yet, at the moment, there appears to be no consensus among the dominant socio-political actors on appropriate political initiatives and, as a result, no concrete measures aimed at addressing the issue have been taken so far. The formulation and implementation of an active ageing policy is restricted by a variety of factors, including the following: First, an attempt to raise the participation rates of older people makes sense only if employment opportunities exist and the net job growth rate is substantial. Greece’s net job growth rate over the 90s, however, was modest and this in spite of the strong output growth rates which prevailed during the latter half of the same period. In 2001, the overall employment rate was estimated at 55.4 (one of the lowest in EU, 14.6 percentage points below the target set at the Lisbon Council), having grown by a mere 0.5% annually during the last five years. Second, without substantial net job growth, increased employment among older workers, is bound to cause some substitution with the young. In 1999, Greece exhibited the highest youth unemployment rate in the EU (31.6% in comparison with 17.9% which was the average for EU-15). Third, the sectoral and occupational structure of older workers in Greece imply that it is difficult to apply a uniform policy for retaining older workers in employment. Around half of the older workers work in agriculture, either as self employed or as unpaid family workers. It should be borne in mind that the EU’s CAP currently favours early retirement. Of the remaining older people still in employment, a sizeable part works in traditional and declining sectors (e.g. traditional manufacturing), as manual workers and technicians in physically demanding jobs. To counterbalance these features, prejudice and discrimination, low employment among the elderly and weak re-employment of ageing workers are perhaps less acute problems in the Greek context, for a number of reasons. First, the household in Greece has retained a lot of its traditional functions, acting as a safety net for older people. This is manifested in the number of older people living alone, which is smaller in Greece compared to other EU countries. Second, Greece (together with Portugal and Ireland) exhibit the highest employment rates for male workers aged 55 or above. The absolute majority of males aged 55-64 years (55%) were still in employment in Greece (1999), compared to 47% in EU-15. Third, the setting and specific features of the labour market in Greece (notably the large share of self-employment), favour the continuation of employment,
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Employment & European Social Fund E
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European Employment Observatory Rev
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Table of Contents Policies Overall
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AUSTRIA The programme of the Austri
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FINLAND Essential changes to legisl
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At least one quarter of the members
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in the event of a third and subsequ
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of active labour-market policy, as
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Training Networks Programme The Tra
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Subsequently, the provisions concer
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a strengthening and revitalisation
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workers into the labour market as w
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This reinforced targeting and resul
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BELGIUM The Occupational Immersion
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Agreement on converting 10,000 subs
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outplacement procedure, its duratio
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Integration agreements Another impo
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and local job and volunteering oppo
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FINLAND Preliminary information on
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BELGIUM Harmonisation and simplific
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• Returning migrants Eligibility
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Playing the generation game: an ove
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workers, who have either exited the
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e) Finland’s comprehensive approa
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Compared with the figures for 1997,
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Table 4: Activity quotas by age and
Page 53 and 54: Table 6: Length of unemployment by
Page 55 and 56: 4Prospects In view of the demograph
Page 57 and 58: and is exempted from the obligation
Page 59 and 60: The Government is also addressing t
Page 61 and 62: permanente, 97-124 Desmet, R. and J
Page 63 and 64: Table 4: Breakdown by age of older
Page 65 and 66: Figure 1: Gender gap in the activit
Page 67 and 68: Figure 5: Effective and statutory r
Page 69 and 70: 3. Recent trends in policies As alr
Page 71 and 72: 3.3 Labour market programmes for el
Page 73 and 74: Figure 1: Population aged 15 and ov
Page 75 and 76: Table 3: Labour market transition r
Page 77 and 78: companies. One of these projects wa
Page 79 and 80: Table 2: Projection of the economic
Page 81 and 82: Table 8: Numbers entering Early Ret
Page 83 and 84: Figure 1: Rate of access to trainin
Page 85 and 86: Germany 1 Introduction As far back
Page 87 and 88: Figure 3: Potentially economically
Page 89 and 90: Figure 5: Take-up of early-retireme
Page 91 and 92: Figure 8: Average amounts paid unde
Page 93 and 94: 64.5% (Hain/Tautz 2001: 365) withou
Page 95 and 96: Table 6: Collectively agreed workin
Page 97 and 98: Strukturbruch und Arbeitsmark-tentw
Page 99 and 100: men (Figure 3). In clear contrast w
Page 101 and 102: Figure 5: Unemployment rates, males
Page 103: More recent data, provided by Euros
Page 107 and 108: Ireland 1. Introduction This Paper
Page 109 and 110: Table 3: Labour force trends, 1991-
Page 111 and 112: Table 4: Employment by age across s
Page 113 and 114: Occupational pensions There are als
Page 115 and 116: Italy 1. Introduction The EU offici
Page 117 and 118: Table 7: Activity rates (age 55-64)
Page 119 and 120: Table 10: Forecasts of employment r
Page 121 and 122: should take the territorial imbalan
Page 123 and 124: 2. Statistical Data 5 Number of pen
Page 125 and 126: 4.2 Measures to encourage older wor
Page 127 and 128: 6. Conclusions With regard to keepi
Page 129 and 130: level. No taxes and social premiums
Page 131 and 132: edundancy scheme by employers. The
Page 133 and 134: uittreding: early retirement) schem
Page 135 and 136: Figure 4: Dependency and ageing ind
Page 137 and 138: Figure 8: Percentage of working age
Page 139 and 140: Figure 11: Average age of workers l
Page 141 and 142: Figure 2: percentage change between
Page 143 and 144: Figure 4: Figure 5: 25 20 15 10 0 -
Page 145 and 146: 100 90 80 70 60 50 40 30 20 10 Figu
Page 147 and 148: However, this measure does not cove
Page 149 and 150: Table 1(a): Employment rate, men, 5
Page 151 and 152: Figure 3(b): Main Source of income
Page 153 and 154: 4. Policies to stimulate active age
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Appendix Table A1(a): Participation
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Venta • Salg • Verkauf • Pvl
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