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Trends 5. Summary of policy perspectives From the exposition given in this article, it is evident that the challenges raised by the ageing of the workforce have been high on the Danish political agenda since the mid-1990s. This is caused by long-term considerations concerning the changing demographic composition of the Danish population in the first half of this century. Furthermore, the present low level of unemployment has stimulated a fear of labour shortages also in the short-term. The political strategy being implemented has two main elements. One is to make retirement less economically attractive to the older part of the workforce and thereby remove some of the economic incentives influencing the current downward trend in the average retirement age. The most significant example is the reform of the Voluntary Retirement Pay, which to some degree has dampened the inflow to the scheme. However, a number of observers are still calling for further reforms that will more effectively reduce the number of recipients, which by now is significantly larger than the total number of unemployed. The other element in the strategy is to increase the awareness of both firms and older workers of the qualifications and potentials of senior employees, and the possibilities to relocate older workers and to use various forms of flexible retirement strategies. The recent reform of the anticipatory pension system is also aimed at keeping persons with reduced employability at work instead of offering early retirement as the main option. Of course, it still remains an open question, whether the strategy in its current form, combined with other policies including a tax reform, will be sufficient to reach the target of an overall increase in total employment by 85,000 persons over the decade from 2001- 2010. Given the fact that recent employment figures indicate a fall, not a rise, in total employment from 2,814,000 persons in the third quarter of 2000 to 2,779,000 persons in the third quarter of 2002, there is still a long way to go. Per Kongshøj Madsen Finland Introduction The ageing Finnish working population is growing at a rapid rate. In 2000 about 69% of the population were 15-54 years of age, and 18% had reached the age of 65. It is expected that by 2030 almost 30% of the population will be 65 years or over (Figure 1). The baby boom generation born in 1945-1955 will reach retirement age in 2010- 2020. When this happens about 80,000 to 90,000 people will exit annually from the labour market while at the same time only 60,000 people will be entering it. If the early exit behaviour of the Finnish workforce remains at previous levels, workforce will begin to fall after 2006. The increase in working-age population concentrates on those 55 and over in 2000-2010. Without immigration the workingage population is estimated to start to decline in 2010. Bibliography 2005-udvalget: Videreførelse af den aktive arbejdsmarkedspolitik [Continuing the active labour market policy], København, 1998 Arbejdsministeriet og Socialministeriet (1997): Etablering af skånejob på arbejdsmarkedet [Establishing protected jobs on the labour market], København 1997. Arbejdsministeriet (1996): Arbejdsmarkedspolitisk rapport 1996: Kapitel 2: De ældre, tilbagetrækni-ng og seniorpolitik [Report on Labour Market Policy 1996: Chapter 2: The elderly, retirement and senior policy], København 1996 Arbejdsministeriet (1998): Den ny efterløn [The new Voluntary Early Retirement Pay], København, 1998 Dansk Arbejdsgiverforening (1997): Rapport om seniorer på arbejdsmarkedet – muligheder og barrierer [Report on senior employment – possibilities and barriers], DA Forlag, København, 1997 Dansk Arbejdsgiverforening (2002): “Brat erhvervsafsked for danske ældre” [Rapid exit for Danish older workers”, AGENDA no. 19 Finansministeriet (2002): Finansredegørelse 2002 [Economic Report 2002], København The Government (2002): Denmark’s National Action Plan for Employment 2002. Holt, Helle (1998): En kortlægning af danske virksomheders sociale ansvar [A charting of the social responsibility of Danish companies], Socialforsknings-institutttet 98:1, 1998 Ingerslev, Olaf & Pedersen, Lisbeth (1997): “At være eller ikke være – på arbejdsmarkedet” [To be or not to be – on the labour market], Samfundsøkonomen 1997:1, pp. 13-18 Ministry of Social Affairs (2002): National strategy report on the Danish pension system, København Regeringen (2002): Flere i arbejde [More people at work], København A declining working-age population puts heavy pressures on the social protection system. The dependency ratio, which describes the share of children (0-14 years of age) and those over 65 years of age to the working-age population (15-64 years of age), will start to rise after 2010. In 2030 the dependency ratio will rise to 70% and will remain at high levels for years to come. In 2001 the dependency ratio was 49%. (Sosiaali- ja terveysministeriö, 2002a) In 2000 social expenditure corresponded to 25% of GDP. It is estimated that this share will rise significantly during the next twenty years. Increased spending on earnings-related pensions, healthcare, and old-age care are the main factors behind the increase in the social expenditure ratio. Depending on the assumptions made on demographic changes and care needs, social expenditure is 72 Spring 2003 | European Employment Observatory Review
Figure 1: Population aged 15 and over, 2000-2050 percentage 80 70 60 50 40 30 20 10 0 expected to rise to 30-40% of GDP by 2050. (Lassila & Valkonen, 2002) It is widely recognised among policy-makers that one of the biggest challenges for the Finnish welfare society is that people leave working life too early, on average before the age of 60. The official retirement age is 65. Early retirement magnifies the unfavourable impact that demographic change has on employment. It has markedly lowered the labour force participation rates of older workers. The Government launched the National Programme on Ageing Workers (1998-2002) to encourage older workers to remain in work and to improve their chances of finding work. Many of the measures aimed at keeping ageing employees at work have involved pension policy decisions. Legislation on pensions and other forms of social protection has been changed so as to discourage early exit and encourage staying on at work. (Ministry of Social Affairs and Health, 2002a) Trends and developments on the labour market Labour markets are still recovering from the deep recession that the Finnish economy experienced at the beginning of the 1990s. Labour force participation and employment rates have not yet reached the late 1980s’ levels. The 55-59 age group is the only group whose labour force participation and employment rates are higher today than before the recession. In the age group 60-64 labour force participation and employment rates are still at very low levels. Only 30% of men and 24% of women in this age group participated in the labour force in 2001. However, the employment rate for older workers has gone up relatively fast and is catching up with the employment rate for other age groups (Table 1). The improvement of the employment rate for older workers stems mainly from the fact that employed people are now able to stay on in work longer, rather than that older unemployed people find it easier 15–54 55–64 65+ Spring 2003 | European Employment Observatory Review 73 age 2000 2010 2030 2050 Trends Source: Eurostat, Population Statistics to obtain employment. It also partly reflects the rapid increase in part-time pensions since 1998, which was a response to lowering the eligible age. In 2001, as many as 11% of employed people aged 55-64 were receiving a part-time pension. If the number of pensioners working part-time was corrected to full-time equivalent numbers, the employment rate would be two percentage points lower (Sosiaali- ja terveysministeriö, 2002b). Since 1998 employment rates in the 55-59 age group in Finland have been higher than EU average. This is mainly due to higher than average employment rates among Finnish women. The employment rates among older Finnish men are markedly lower than in other EU Member States on average, in particular in the age group 60-64. It has been estimated that if employment rates remain at 2001 levels in the different age groups, the number of employed people would shrink by 100,000 by 2010. On the other hand, if those over 50 years of age remain one year longer in employment, the number of employed people would remain at present levels up to 2010. To maintain employment it is therefore of the utmost importance to increase the average retirement age in Finland in years to come. The stability of employment among older workers has improved over the last few years. About 77% of people aged 55 or over, who were employed in the previous year, were still employed in 1995 (Table 2). The corresponding figure for 2000 was over 84%. In particular, early exit rate has gone down. In 1990, about 17% of those aged 55 and over, who were employed in the previous year, exited from the labour market in order to take pension. In 2000 only 8% did so. In the prime-age group (those aged 25-44) about 93% remained employed and only 0.1% took pension in 2000. The improved employment situation among older workers has led to an increase in the average pension age. In 1990 the average pension age was 58.2; it had risen to 59.3 in 2000. 1 1 The average pension age reported here is based on simple population share-calculations and do not take into account changes in life expectancy. See, Sosiaali- ja terveysministeriö (2002b), pp. 66-67.
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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
Page 21 and 22: a strengthening and revitalisation
Page 23 and 24: workers into the labour market as w
Page 25 and 26: This reinforced targeting and resul
Page 27 and 28: BELGIUM The Occupational Immersion
Page 29 and 30: Agreement on converting 10,000 subs
Page 31 and 32: outplacement procedure, its duratio
Page 33 and 34: Integration agreements Another impo
Page 35 and 36: and local job and volunteering oppo
Page 37 and 38: FINLAND Preliminary information on
Page 39 and 40: BELGIUM Harmonisation and simplific
Page 41 and 42: • Returning migrants Eligibility
Page 43 and 44: Playing the generation game: an ove
Page 45 and 46: workers, who have either exited the
Page 47 and 48: e) Finland’s comprehensive approa
Page 49 and 50: Compared with the figures for 1997,
Page 51 and 52: 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: 3.3 Labour market programmes for el
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 and 104: More recent data, provided by Euros
Page 105 and 106: pensions retracted to normal levels
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
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2. Statistical Data 5 Number of pen
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4.2 Measures to encourage older wor
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6. Conclusions With regard to keepi
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level. No taxes and social premiums
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edundancy scheme by employers. The
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uittreding: early retirement) schem
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Figure 4: Dependency and ageing ind
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Figure 8: Percentage of working age
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Figure 11: Average age of workers l
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Figure 2: percentage change between
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Figure 4: Figure 5: 25 20 15 10 0 -
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100 90 80 70 60 50 40 30 20 10 Figu
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However, this measure does not cove
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Table 1(a): Employment rate, men, 5
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Figure 3(b): Main Source of income
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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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