Article

The Effect of Early Retirement Incentives on the Training Participation of Older Workers

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Abstract

Human capital theory predicts that older workers are less likely to participate in on-the-job training than younger workers, due to lower net returns on such investments. Early retirement institutions are likely to affect these returns. Using the European Community Household Panel we show that older workers participate less in training, and that early retirement institutions do indeed matter. Generous early retirement schemes discourage older workers from taking part in training, whereas flexible early retirement schemes encourage this. Finally, the results suggest that in most European countries training can keep older workers longer in the labour market. Copyright 2009 CEIS, Fondazione Giacomo Brodolini and Blackwell Publishing Ltd..

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... Hofäcker and Radl, 2016). Existing evidence indeed suggests that training older workers effectively leads to more motivated employees (Leppel et al., 2012) and delayed retirement (Fouarge and Schils, 2009;Picchio and Van Ours, 2013). Training has also been shown to yield tangible benefits for workers, as it can contribute to higher wages (Bassanini et al., 2007;Lee, 2009;O'Connell and Byrne, 2012) and job security (Katsimi, 2008). ...
... Several studies show that women are under-trained vis-à-vis their male counterparts (Duncan and Hoffman, 1979;Knoke and Ishio, 1998;Frazis et al., 2000;Evertsson, 2004;Dieckhoff and Steiber, 2011). However, it has also been found that female workers are comparatively over-trained (Bassanini et al., 2007;O'Halloran, 2008;Fouarge and Schils, 2009) or that there is no gender training gap (Green and Zanchi, 1997;Karpinska et al., 2015). We argue that gender and age differences should be studied jointly, as several studies have concluded that specifically older women are trained more often than older men (Arulampalam et al., 2004); that female under-training is far larger among younger than among older women (Knoke and Ishio, 1998); and that the age decline in training participation is stronger for men than for women (Carmichael and Ercolani, 2014). ...
... First, it allows us to innovatively connect information about the employees and about the organisations they work for, acknowledging that training decisions result from an interplay between these levels (Carmichael and Ercolani, 2014). Notably, most previous research on training older workers is based on managerial surveys (Armstrong-Stassen and Templer, 2005) or managerial vignette studies (Lazazzara et al., 2013;Karpinska et al., 2015;Fleischmann and Koster, 2017), incapable of examining employee initiatives, or based on population surveys, incapable of examining the role of organisations (Cully et al., 2000;Taylor and Urwin, 2001;Fouarge and Schils, 2009;Canduela et al., 2012;Carmichael and Ercolani, 2014). Second, the ESWS captures the intensity of training participation, whereas previous studies on training participation tend to be restricted to the incidence of training (e.g. ...
Article
Despite its benefits for prolonging careers, participation in training is far lower among older employees (age 50+) than among younger employees. This study analyses gender differences in older employees’ training participation. To investigate the predictors of training intensity, we examine two forms of training: formal educational programmes and on-the-job training. The study draws on a novel data-set, the European Sustainable Workforce Survey, carried out in nine European countries in 2015 and 2016, analysing 2,517 older employees and their managers, spread over 228 organisations. We concentrate on the interplay between employees’ gender, managers’ gender and managers’ ageism in shaping older employees’ training participation. Our findings indicate comparable training participation of older men and women in both forms of training, yet older women more often pay for enrolment in educational programmes themselves. Also, predictors of training participation are different. In line with the tenet of ‘gendered ageism’, we find that managerial ageism primarily targets older women, excluding female employees from the training opportunities available to their comparable male colleagues. Finally, female managers are associated with higher training participation rates for older employees, but only for older men. This result supports ‘queen bee’ arguments and runs counter to ‘homophily’ arguments. Overall, the study demonstrates that workplace dynamics and managerial decisions contribute to the reproduction of traditional gender divides in the late career.
... There is a vast body of research indicating that lower educated workers lag behind in terms of training participation. Bassanini et al. (2005) show that this holds for most industrialized countries, and Fouarge and Schils (2009) and Ester and Kerkhofs (2009) more recently showed this specifically for The Netherlands. Although training participation rates among lower educated Dutch workers have increased by 7 percent in the last 15 years, this percentage is considerably smaller than the average increase in training participation of all Dutch workers in that same period (16.6 percent) (Fouarge and Schils, 2009 (Fouarge and Schils, 2009). ...
... Bassanini et al. (2005) show that this holds for most industrialized countries, and Fouarge and Schils (2009) and Ester and Kerkhofs (2009) more recently showed this specifically for The Netherlands. Although training participation rates among lower educated Dutch workers have increased by 7 percent in the last 15 years, this percentage is considerably smaller than the average increase in training participation of all Dutch workers in that same period (16.6 percent) (Fouarge and Schils, 2009 (Fouarge and Schils, 2009). As a consequence the already precarious labor market position of lower educated workers could weaken further. ...
... Bassanini et al. (2005) show that this holds for most industrialized countries, and Fouarge and Schils (2009) and Ester and Kerkhofs (2009) more recently showed this specifically for The Netherlands. Although training participation rates among lower educated Dutch workers have increased by 7 percent in the last 15 years, this percentage is considerably smaller than the average increase in training participation of all Dutch workers in that same period (16.6 percent) (Fouarge and Schils, 2009 (Fouarge and Schils, 2009). As a consequence the already precarious labor market position of lower educated workers could weaken further. ...
Article
Purpose – The purpose of this study is to contribute to the discussion on how to increase lower educated workers' participation in training programs inside and outside the workplace through stimulating intentions with respect to training. Design/methodology/approach – This article is based on data from the Study on Life Long Learning and Employment by TNO (Netherlands Organisation for Applied Scientific Research), a three‐wave longitudinal study among lower educated workers in three different companies in The Netherlands. Data from the baseline questionnaire on 213 workers who are not currently participating in training activities are used along with a multiple regression model to test whether subjective norms, perceived behavioral control, attitude/expected value, management support, coworker support, career orientation, job insecurity and prior participation in informal learning correlate with lower educated workers' intentions with respect to training. Findings – This study shows that when stimulating lower educated workers' intentions with respect to training, one should focus on their attitude towards training participation, their subjective norms on training participation and their perceived behavioral control over participating in training. These aspects can be influenced through management support, coworker support and promoting career orientation. These factors contribute to the personal factors and thus, although indirectly, stimulate intentions with respect to training. Originality/value – This article is the first to present clear ideas on ways to stimulate lower educated workers' intentions to participate in workplace learning activities and to develop interventions to strengthen their current and future labor market position. It also shows that in stimulating lower educated workers' intentions with respect to training the focus should be on individual, as well as organizational, or group factors.
... While some studies show that older workers are in fact willing to work longer, especially when job schedules are flexible (Ameriks et al., 2020), and that older workers' willingness to compete is similar to that of younger workers' (Charness and Villeval, 2009), 7 we are not aware of any causal evidence showing that older workers are actually willing to learn new approaches and techniques. While some overview studies suggest that more generous pension systems reduce the incentives for participation in training (Bassanini et al., 2007;Fouarge and Schils, 2009), the only evidence we have on the topic so far comes from participation behavior in the continuous training activities of older workers in response to increases in the retirement age (Brunello and Comi, 2015;Montizaan et al., 2010). However, these studies are not able to disentangle the willingness of the worker to learn from other factors such as the requirement of the employer or the financial restraints of the worker. ...
... There are a few studies investigating the relationship between the retirement system and adult education. Early overview articles on European countries by Bassanini et al. (2007) and Fouarge and Schils (2009) found that the participation of older employees in training is lower when the pension system is more generous, although these studies do not claim to identify causality. 18 Montizaan et al. (2010) examine a pension reform in the Dutch public sector and show that a later (expected) retirement age leads to higher training participation rates for affected workers in large organizations. ...
Preprint
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Adult education can mitigate the productivity decline in aging societies if older workers are willing to learn. We examine a generous partial retirement reform in Germany that led to a massive increase in early retirement. Using county-level administrative data on voluntary education activities, we employ a difference-indifferences approach for identification. The estimates show a strong increase in participation in adult education, specifically in cognitively demanding courses, for early retirees who would have continued working in the absence of the reform. This supports the notion of an intrinsic willingness of older individuals to acquire skills and abilities independent of financial incentives. JEL: E24, I21, J14, J24, J26
... Various studies showed that training incidence decreases with age. Moreover, Bassanini et al. (2005) and Schils (2009) found that training participation of older workers is lower in countries with more generous early pension systems, while Montizaan et al. (2010) showed that the retrenchment of pension rights leads to higher training participation among older workers in large organizations. Similarly, Brunello and Comi (2013) showed that policies that increase the retirement age are effective in increasing training participation by senior workers. ...
Research
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This paper investigates whether employers can induce employees to postpone retirement by offering access to training courses that maintain job proficiency. We use unique, matched employer–employee surveys for the Dutch public sector, which include detailed information on a wide range of HR practices applied in the organization, as well as the expected retirement age of its employees. We find that training policies, as reported by employers, are significantly positively related to employee expected retirement age, irrespective of whether employees actually participate in training. We show that this positive relationship is driven by employees’ positive reciprocal inclinations, indicating that provision of training may serve as a tool to motivate older employees in their job and consequently to retire later. The provision of training access may therefore complement existing pension reforms in many industrialized countries that aim to increase labor-force participation of older workers. Robustness analyses indicate that the relationship between offering training access and expected age of retirement is unlikely to be driven by reverse causality, self-selection, or the presence of other organizational characteristics. Keywords: Training access, reciprocity and retirement Jel codes: J24, J31, I2
... More specifically, in relation to learning and development of older workers even more negative stereotypes are in place: First, it is argued that employers expect a lower return on investment from sending older employees to trainings and in contrast they see more future possibilities and potential in the younger workers, therefore investing less in training for the older employees (Van Selm & Van der Heijden, 2013; Fouarge & Schils, 2009). Second, research found that superiors often believe that the older workers are not able to work with 20 new technologies, and therefore they do not train them to work with the new technologies and machines (Maurer, 2001). ...
Article
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In today’s time of demographic change and rapid innovation, age and employability as well as the role of learning and development are high on the agenda of policy makers and human resource managers. Empirical studies, however, do not provide consistent evidence for the relation between age and employability and between age and work-related formal and informal learning. While many studies find negative relationships, some other studies present positive or insignificant effects. The inconsistent results may hint at conceptual weaknesses of chronological age as a measure, which are often ignored. One such weakness is the difficulty to disentangle age effects from cohort and period effects. Moreover, since people become more heterogeneous the older they get, the less suitable age is as predictor. Therefore, we state that chronological age in itself may not be the most important factor in predicting work-related learning and employability. Alternative significant predictors might be work centrality, learning self-efficacy and future time perspective. In addition, we identify age-related individual and organizational obstacles for work-related learning and employability. Two of the most prominent individual obstacles are a decline in motivation to learn and less capability to learn. Organizational barriers are due to negative stereotypes about aging workers and a lack of supportive learning climate for older workers. Therefore, research on other individual and organizational factors might provide more satisfying answers and contribute to new insights for the management of an increasingly older workforce.
... In line with the above results, generous early retirement policies are found to discourage training of older workers and flexible retirement policies to stimulate it. Fouarge and Schils (2009) investigate training differentials in employed individuals on a threshold of 55 years (groups 25-44, 45-54, and 55-64) in 13 European countries based on underlying retirement schemes. 7 Calculation of generosity indicator is based on implicit taxes on continued employment and replacement rate while calculation of flexibility indicator is based on strictness to entitlement (minimum age and minimum contribution period). ...
Article
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The paper reviews international experience with selected measures aimed at increasing employment of older workers and identifies best practices. Among the measures addressing worker obstacles, the paper focuses on the promotion of training, on adjusting employment services and active labour market programs for older workers, and on promoting better working conditions; among the areas addressing employer obstacles, it focuses on adjusting employment protection rules for older workers, on subsidizing wages of older workers, and on challenging employers’ negative perceptions. In addition, to offer a perspective into more holistic approaches that countries have applied, the report provides three case studies of targeted programs on older workers in United Kingdom, Germany, and Canada.
... One of the main misconceptions about older workers is an assumption that they are unwilling to train (Flynn, 2014). The benefits of upskilling the workforce have been established in various studies and are discussed in detail in §4.3.1 and §4.3.2, including how training can be helpful in extending working lives (Fouarge and Schils, 2009) and in retention of older workers; moreover, the latter are as likely to succeed in it as are younger colleagues (Employing Older Workers, 2013) ( §4.3.4). Crossgenerational mentoring programmes are identified as being beneficial in facilitating knowledge transfer, a critical need for many organisations (Trawinski, 2016). ...
Book
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As increasing numbers of people decide to remain in the workforce beyond the traditional retirement age – whether by choice or necessity – new prospects arise for individuals, educational providers, employers and businesses. While individuals can remain active members of the workforce, with advantages to themselves, society and the economy, employers can also benefit from the available talent of people of all ages, making the workplace more diverse and inclusive. Changing workforce dynamics point to the need for a shift towards more ‘age-friendly’ policies and practices, supported by the public policy. This report is designed to be of interest to a range of colleagues including: policy makers; employers; education and training providers; trade unions; businesses; researchers; and individuals.
... Organizations can offer a variety of personnel policies that aim to improve the employability of their older workers. In the academic literature, studies tend to focus on training arrangements (Fouarge & Schils, 2009;Leppel, Brucker, & Cochran, 2012;Picchio & Van Ours, 2013). To further cater for the needs of older workers, organizations are known to offer other types of arrangements as well. ...
... As in the Netherlands and Switzerland, part-time work in Germany is not inferior to full-time work in terms of social security arrangements (e.g., unemployment insurance, disability and pension benefits), but it is inferior in terms of job stability, wages, and career perspectives (Fouarge and Schils, 2009). Indeed, the part-time pay penalty in Germany is even slightly larger than in the Netherlands (Gustafsson et al., 1996), and German women ...
Thesis
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This cumulative dissertation is divided into four self-contained articles, each analyzing important decisions during the life course. Rational behavior is the theoretical framework for each article. Starting with childhood, the first investigates the decision among various secondary school tracks following elementary school. The second examines the decisions after secondary school related to transitions from secondary track into apprenticeship training and from apprenticeship training into the labor market. The third investigates the consequences of a decision in early adulthood and analyzes wage differences for men based on the type of compulsory military service. The fourth considers lifelong learning and analyzes working hours and gender-specific training participation.
... Studies that consider the welfare regime (Esping-Andersen, 1990) might shed some light here: female participation rates in formal adult education without employer support in the Nordic countries, that facilitate combining work and family and that emphasize gender equality, are more pronounced relative to Southern and Central European countries, characterized by the male breadwinner model Rubenson, 2006;Rubenson & Desjardins, 2009). Despite growing evidence of gendered participation in adult education (Astone et al., 2000;Cruce & Hillman, 2012;Denice, 2017;Fouarge & Schils, 2009;Pallas, 2002), also from a cross-comparative perspective Kilpi-Jakonen et al., 2012), this research often relies on general welfare state categories and fails to examine systematically the importance of various aspects of family policies, for example, leave policies, flexible work arrangements, childcare support, and measures that increase father involvement. ...
Article
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In countries around the world, population aging, technological change, and labor market transformations are leading to an increasing incidence of mismatch between the skills and credentials held by workers and those required by their jobs. This is leading large numbers of people to return to schooling to enhance their prospects in the workplace. Access to adult education is highly stratified, and the returns to educational re-entry vary across social categories. This state-of-the-art paper focuses on two aspects. First, it examines the degree to which adult education (specifically, degree-bearing education) most benefits the less advantaged and thus mitigates socioeconomic inequality (second chance effects). Second, it addresses the degree to which the benefits of adult education go primarily to those who are already advantaged (Matthew Effects). Our review adopts the perspective of the socioeconomic life course and is explicitly cross-nationally comparative.
... In particular, they emphasize that an increase in retirement age and a strong link between pensions and contributions encourage investment in education. 12 Fouarge and Schils (2009) empirically investigate to what extent older workers' investments in training depend on the pension system. In a field experiment, Messer and Wolter (2009) show that the voucher had a significant causal impact on participation in training programs. ...
Article
Full-text available
The gains in life expectancy are expected to double the dependency ratio and increase population by 10% in Switzerland until 2050. To quantify the effects on social security and public finances, we use an overlapping generations model with five margins of labor supply: labor market participation, hours worked, job search, retirement, and on-the-job training. A passive fiscal strategy would be very costly. A comprehensive reform, including an increase in the retirement age to 68 years, may limit the tax increases to 4 percentage points of value added tax and reduce the decline of per capita income to less than 6%.
... In turn, levels of training influence employees ability to meet technological challenges and to be productive in changing work environments. In support of this, it has been found that older workers who continue to receive training are substantially less likely to retire early (Fouarge and Schils 2009 (Kass and the USPCB 2003, 195) There is some evidence for this claim. In particular, peak scientific productivity, measured primarily by patent applications and Nobel Prize winners appears to occur between the ages of 30 and 40 (National Research Council 2012, Ch 6). ...
Thesis
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A significant reduction in calorie intake, known as calorie restriction (CR), has been shown to increase lifespan in a wide variety of animal subjects. If these results translated to humans, CR could substantially increase human lifespans by decelerating ageing. This possibility has led to an effort to develop calorie restriction mimetic drugs (CRMs) that mimic the effects of CR without the need to reduce calorie intake. This project examines the social and ethical implications of extending lifespans using CR and CRMs. The thesis is in three parts. Part I looks closer at the empirical questions about CR and CRMs, and in particular the issue of whether results from animal studies would translate to humans. I argue that although the evidence is far from conclusive, there are grounds to think that CR could slow ageing and extend lifespan in humans. Part II examines the implications of prolonging lifespan for individual welfare. I argue that historical and philosophical objections to life extension on the grounds of individual welfare are unsuccessful against CR. CR itself may have some undesirable effects, although these are due to the stringent diet and are unlikely to result from CRMs. Part III discusses the social impact of CRMs, assessing common ethical objections to life extension on the grounds of fairness and social welfare. I claim that it would be fair to distribute CRMs by public health services. Moreover, concerns about the demographic impact of longer lives can be mitigated. Indeed, a wide distribution of life extending technologies could improve social welfare. Overall, I claim that CR and CRMs are compatible with, and could further, values that are significant for individuals and societies.
... Older birth cohorts generally achieved lower educational levels than their younger peers and, consequently, have less knowledge and skills to adapt to technological innovations. Second, from a life course perspective, older workers are less likely to participate in training programmes (Fouarge & Schils, 2009;Lindsay, Canduela & Raeside, 2013;Taylor & Urwin, 2001), despite the fact that they are seen as less productive than younger workers (Van Dalen et al., 2010b). Training participation rates of older workers are quite low compared to younger employees in the Netherlands. ...
Book
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As a response to population ageing and in order to keep public pensions affordable, the Dutch government has implemented policies to encourage longer working lives. A commonly voiced concern is that social inequality in old age will increase as a result of the policy reforms. Policies to extend working lives are usually implemented across the board, regardless of older people’s ability, need and willingness to work longer. This book examines social inequality between older workers and older couples in the Netherlands. The findings of this book reveal significant educational and social class disparities in employment, early retirement, disability, unemployment, downward occupational mobility, reduction of working time, the division of paid work between partners and disadvantageous late-life employment trajectories of couples. More importantly, lower educated older workers in lower social classes are generally worse off than higher educated older workers in higher social classes when it comes to adverse labour market outcomes. Social inequality between older workers and older couples is increasing and will continue to do so if underprivileged older workers and disadvantaged older couples are not supported.
... De human capital theorie van G. S. Becker (1962) voorspelt dat ouderen minder investeren in training vermits hun aantal resterende jaren op de arbeidsmarkt lager ligt dan voor andere leeftijdscategorieën. Ook Ben-Porath (1967) beschrijft in zijn werk 'The Production of Human Capital and the Life Cycle of Earnings' dat oudere leeftijdsgroepen minder deelnemen aan training door de beperktere periode waarin het rendement verkregen wordt. Het bestaan van vroegtijdige uittredingskanalen verhoogt deze negatieve effecten omdat verwacht wordt dat de werknemer nog minder lang op de arbeidsmarkt blijft (Fouarge & Schils, 2009). Dit zorgt ervoor dat ze de kost van de training over een beperktere periode kunnen 'afschrijven', om het in boekhoudkundige termen te illustreren (Wooden, van den Heuvel, Cully, 2001). ...
Thesis
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Abstract Het Belgische beleid moet inspanningen leveren om de kosten van de vergrijzing onder controle te houden. Om het hoofd te bieden aan de verhoogde uitgaven is het belangrijk om de vervroegde uittrede van oudere werknemers tegen te gaan en op deze manier hun werkzaamheidsgraad te verhogen. Er wordt in dit werk gefocust op de invloed van het investeren in werk-gerelateerde training voor oudere werknemers op de uittrede-intenties van deze groep. De doelgroep van deze studie zijn werkende Belgen tussen 50 en 64 jaar. Met behulp van logistische regressie wordt vooreerst nagegaan welke factoren de participatie in training beïnvloeden. Vervolgens wordt de invloed van training op vervroegde uittrede nagegaan a.d.h.v. een logistische regressie, gecontroleerd voor zelfselectie met de Heckman twee-staps procedure. Deze empirische analyse wordt uitgevoerd op de vierde golf van de SHARE-dataset. De resultaten bevestigen dat de participatie in training kan zorgen voor een afname van de uittrede-intentie. Het is echter wel zo dat training momenteel voornamelijk aan de sterkere werknemers gegeven wordt. Het is dus belangrijk dat het beleid meer inzet op training en hierbij de nodige aandacht voorziet aan de inclusie van zwakkere groepen. Trefwoorden: vergrijzing – tewerkstelling - oudere werknemers - vervroegde uittrede – training – zelfselectie - push-factoren – intenties Aantal pagina’s: 52
... An inverse relationship (e.g. Aldridge & Hughes, 2012;Boeren et al., 2010;Rosdahl, 2015) low net return of investments (ROI) (Fouarge & Schils, 2009) Women participate more in the Nordic countries, men in most other countries (Massing & Gauly, 2017), gender-segregated labour market, females with less learning opportunities at work (Georgellis & Lange, 2009) Individual ...
Article
This study explored drivers of participation in job-related lifelong Learning (LLL) among low-educated mature-aged employees and compared them across four Nordic countries. Workplaces can be low-threshold, effective arenas for development of their skills in work and learning. The paper builds on the Bounded Agency Model and theories of learning motivation, human capital, and workplace learning. We used data from the Survey of Adult Skills (Programme for the International Assessment of Adult Competencies) by Organisation for Economic Co-operation and Development. The average participation rate was 36%. Results of the logistic regression analyses showed that income, skills use at work, sector and gender were significant drivers of participation in all countries. Additionally, being under-skilled was significant in Finland and parents’ education in Sweden. Totally, these variables explained a quarter of the variation in participation. Thus, the drivers of participation appeared more similar than different across the countries. Implications of the findings are discussed in relation to how to support skills development among low-educated older workers, and to some challenges in cross-country comparative research.
... This statement is backed by a previous researcher in which each organization needs to see the preparation of the training programme as a return in the future [4]. It is also supported by previous researchers that training returns will be visible when staff's International Journal of Psychosocial Rehabilitation, Vol. 23, Issue 02, 2019 ISSN: 1475-7192 productivity increases and the organization's income increases [12,25]. Additionally, university's commitment to see the importance of training and giving staff the opportunity to choose their own training is one of the high-value university commitments. ...
Article
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Training and development are seen as an important tool for organizational needs. Many organizations are now more likely to emphasize on the aspects of training and development as a way to promote the development of workers to achieve a highly-skilled workforce. Staff participation in training programmes is essential to improve the ability of employees and the trust to carry out the assigned tasks. Refer to these requirements, this study aims to continuously explore organizational factors affecting the participation of academic staff at public universities in Malaysia in programme training. This study has been using a qualitative method whereby a total of seven (7) officers from a university in Malaysia were interviewed. The data obtained was analysed using Nvivo10 application. Based on the analysis, (8) eight identified organizational factors are training policies, preventive measures, talent management, management commitments, university training culture, financial constraints, training facilities and facilities management. It is hoped that the findings of this study can be utilized by any interested parties, especially for the Training Division of the Malaysian public universities as well as the Ministry of Higher Education Malaysia (KPTM).
... The demand (by workers) and supply (by firms) of training may be influenced by country, firm, and worker specific characteristics. At the employee level, human capital theory predicts that the decision to participate in training is decreasing with age, due to lower net returns on such investments as workers age (Fouarge and Schils 2009). On the other hand, more educated, married, and full-time employees are more likely to participate in training due to the lower marginal cost of building on existing knowledge, and the willingness to climb the carrier ladder and maintain a steady job (Ng 2005). ...
Article
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Over the past decade, Chinese enterprises have made significant progress in developing new business ventures in Africa. There is ongoing debate whether these Chinese enterprises contribute to local skill development in their host countries. We utilize unique survey data from the construction sector in Ghana to examine the heterogeneity in skill transfer to local workers in Chinese-owned, other foreign, and domestic enterprises. First, our analyses illustrate that there are no significant differences in the characteristics of local employees from Chinese enterprises and those from other enterprises in terms of age, marital status, education background, work experience, and union membership. In terms of employment attributes, while workers in other enterprises on average stay longer with their employers than those working for Chinese enterprises, statistically, we do not observe any significant difference in the share of workers that receive training between Chinese and other construction enterprises. Furthermore, regression estimates suggest that compared to local enterprises, both Chinese and other foreign enterprises contribute positively to short-term general training and long-term specific training of locally hired workers. Indeed, the likelihood of receiving training, especially short-term general training, is higher for Chinese enterprise employees than those of other foreign enterprises.
... Existing studies focus on employed workers and on-the-job training, which is typically (partly) funded by employers, and find positive effects on older workers' employment (e.g. , Picchio and van Ours (2013), Berg et al. (2017)). 3 Only a few papers study the relationship between (early) retirement institutions and on-the-job training of employed workers: Fouarge and Schils (2009) show that generous early retirement schemes discourage older workers from taking part in training, while more flexible schemes encourage. Brunello and Comi (2015) show that an increase in the minimum retirement age in Italy substantially increased training participation by private sector employees aged 40-54. ...
Article
Full-text available
This paper studies the impact of raising the eligibility age of early retirement on the reintegration into the labor market of elderly unemployed workers. I exploit two Austrian pension reforms increasing the early retirement age step-wise for different quarter-of-birth cohorts. Empirical results based on Austrian administrative data reveal a substantial gender difference in how unemployed workers are affected by the policy change. While unemployed women only benefit little with shorter unemployment duration, modest higher re-employment probability as well as labor income after unemployment, unemployed men benefit in several aspects: although unemployment duration remains unaffected, re-employment chances, labor income and participation in active labor market policies significantly increase. Elderly unemployed workers closer to their early retirement age are systematically assigned to programs increasing their job application and job search skills, while workers more than five years away from their early retirement age are more likely to participate in programs increasing their skills. The gender difference may be explained by the nature of the pension reforms. From a policy perspective, these results suggest that increasing the early retirement age is not only a feasible way to improve the financial sustainability of public pension systems but also improves the reintegration of elderly unemployed male workers. JEL Classification: J14, J26, J68
... This translates into more sickness absences and health problems. Moreover, for similar reasons, employers have an incentive to reduce their investment in safety 3 (Feng, 2013) and in professional training (Fouarge andSchils, 2009, Montizaan et al., 2010) for older workers. Second, from the coworkers' perspective, the incentives to support their colleagues at work shrink when the latter approach retirement age (Bauer and Eichenberger, 2017). ...
Article
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We analyze how a reduction in retirement age affects pre-retirement sickness absences and health problems. We examine a policy change in pension eligibility in the Swiss construction sector, which lowered retirement age from 65 to 60. While the reform was intended to improve workers' health, it resulted in the opposite outcome. We find that sickness absences for 56–60-year-old construction workers increase by 33% when working until 60 instead of 65, and their probability of self-reported health problems increases by 54%. We also find a negative but less pronounced effect for the 61–65 age group. Our results imply that lowering the retirement age has not only material costs but also unintended immaterial costs. If the effect is symmetric, it implies that increasing retirement age has immaterial benefits by improving pre-retirement health of older workers.
... Existing studies focus on employed workers and on-the-job training, which is typically (partly) funded by employers, and find positive effects on older workers' employment (e.g. , Picchio and van Ours (2013), Berg et al. (2017)). 3 Only a few papers study the relationship between (early) retirement institutions and on-the-job training of employed workers: Fouarge and Schils (2009) show that generous early retirement schemes discourage older workers from taking part in training, while more flexible schemes encourage. Brunello and Comi (2015) show that an increase in the minimum retirement age in Italy substantially increased training participation by private sector employees aged 40-54. ...
Preprint
Full-text available
This paper studies the impact of raising the eligibility age of early retirement on the reintegration into the labor market of elderly unemployed workers. I exploit two Austrian pension reforms increasing the early retirement age step-wise for different quarter-of-birth cohorts. Empirical results based on Austrian administrative data reveal a substantial gender difference in how unemployed workers are affected by the policy change. While unemployed women only benefit little with shorter unemployment duration, modest higher re-employment probability as well as labor income after unemployment, unemployed men benefit in several aspects: although unemployment duration remains unaffected, re-employment chances, labor income and participation in active labor market policies significantly increase. Elderly unemployed workers closer to their early retirement age are systematically assigned to programs increasing their job application and job search skills, while workers more than five years away from their early retirement age are more likely to participate in programs increasing their skills. The gender difference may be explained by the nature of the pension reforms. From a policy perspective, these results suggest that increasing the early retirement age is not only a feasible way to improve the financial sustainability of public pension systems but also improves the reintegration of elderly unemployed male workers. JEL Classification: J14, J26, J68
... Though that may be an extreme example, comparative evidence points to similar developments in other industrialized economies [9]. ...
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Economic crises in the last decades have swept elderly workers more than younger workers out of employment. But now the tide is turning. In affluent societies, elderly workers will have more opportunities of being employed in meaningful and well-paid jobs than ever be- fore. On account of demographic changes, fewer (younger) workers will be around and most of the reasons that in the past have induced employers to lay off older rather than younger workers will disappear. Future employment strategies will have to focus more on an optimal age mix and on benefitting from the full potential of the elderly.
... Em relação à continuidade da educação, os TAs entrevistados participaram de cursos relativos à educação formal ou cursos de capacitação e treinamento nos últimos dois anos, conforme demonstrado na tabela 2. Este dado pode ser considerado como um fator positivo para o bem-estar na aposentadoria pois como aponta Fouarge & Schils 27 a continuidade na educação melhora as oportunidades do mercado de trabalho para os trabalhadores mais velhos e aumentam a sua participação social. Outro ponto positivo é apontado por França, 2 em relação à educação como promotora de qualidade de vida e manutenção da saúde. ...
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This study analyzed the perceptions of federal civil servant towards their retirement well-being, and how they were preparing themselves for this transition. Its aim was to contribute to a better understanding of their retirement process, as well as subsidizing public policies and retirement preparation programs. This study was performed at the University of Viçosa , state of Minas Gerias, Brazil, and the sample consisted of academic and technical-administrative staff. Data collection was carried out between August, 2010 and February, 2011, using semi-structured interviews. The analysis of the significance of retirement well-being was based on the discourse analysis model established by Patrick Charaudeau. The results suggested that the factors perceived as essential for retirement well-being were health and financial security, both linked to risk factors and survival. The factors considered positive in relation to retirement well-being were: education, family relationships, health and involvement in cultural and leisure activities. Negative aspects in the transition process were a lack of post-retirement work perspectives, of financial security, of prior knowledge of retirement process and possible loss of workplace friendships, all foreseeing possible transitional difficulties. The results emphasized the importance of including family in the retirement preparation program as supported by previous research. It is also evident that there is a lack of retirement preparation program by participants of this research. In conclusion, knowledge of the key factors that contribute to retirement well-being for each professional segment can lead to a higher adhesion to the Programs and consequently overall well-being for individuals and their families.
... Better job characteristics + -Workplace-oriented proactive measures (see Table 6.1 & Interestingly, the same is true for their status in the firm. Whereas the evidence for an impact of PES continuing training on the retention of older workers is weak, raising the retirement age has been shown to be instrumental in increasing the incidence of training among older workers, and generous early retirement schemes have a significant negative impact (Vodopivec, 2019;Montizaan et al., 2010;Fouarge and Schils, 2009). That both the employer and the older worker are less interested in investing in training as retirement nears is a plausible explanation. ...
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Population ageing currently confronts European welfare states and the European economy with unprecedented challenges. In response to demographic ageing there has been, over the past 20 years, a paradigm shift in employment policies towards promoting increased labour force participation by older workers, women, low-skilled workers and migrants. Public policy in regard to older workers has moved from an emphasis on early retirement as an instrument of labour force adjustment, towards the promotion of higher rates of labour force participation and longer working lives for older workers. The main elements of the reforms have been a variety of changes in old age and disability pension systems, unemployment insurance and welfare programmes intended to incentivise people remaining in employment or re-entering employment after job loss.
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Chapter
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Despite rises in employment rates across many countries, older workers (those aged 50+) are less likely than younger employees to receive workplace training and skills development. Using the UK as its starting focus, this chapter analyses the theoretical and empirical reasons for these gaps. The analysis covers in-work training and development, as well as considering the position of those older people who are unemployed but looking for work. The discussion also embraces the roles of training and education for older workers who may want to delay retirement or retire flexibly, and examines the relationships between training, development and active ageing. Concluding discussions highlight national and international policy initiatives to encourage investment in educating and training for this new work generation.
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The ageing of the Australian workforce has raised concerns about economic sustainability and prompted government polices to encourage longer working lives. However, the effectiveness of these policies is limited by a focus on individual workers rather than the organisations employing them. This chapter examines the strengths of older workers, the specific challenges they face and the implications of both for policy reform. It demonstrates that challenges concerning mental health, training and the ‘design of work’ demand stronger policy intervention if employment is to be effectively prolonged. The concept of ‘work ability’ is introduced as a framework for incorporating organisational considerations into policy development.
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This chapter explains the relationship between a worker’s chronological age and her labour productivity. It dwells on the role of changes in physical and cognitive abilities in later life and firm-level questions of human capital obsolescence. It also describes the theory and empirical findings on the association between productivity and earnings in later life.
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Employment protection legislation (EPL) refers to rules limiting the ability of an employer to fire a worker. EPL is often believed to have a strong negative impact on market performance, but field evidence suggests a weak or zero effect. This paper uses an experiment to study EPL, in which firms and workers can endogenously engage in repeated interactions, and firms are unable to enforce effort through explicit contracts. We exogenously vary the presence of an EPL institution in the market, and the form of labor contract available to firms. The first main result is that EPL has a strong negative impact on market efficiency in the case of efficiency wage contracts. In reality, however, firms typically have the option to offer deferred compensation, such as a bonus. The second main result is that EPL has a much milder effect on market efficiency when firms have the option to pay bonuses. We show that EPL harms efficiency in an efficiency wage world because it attacks a key incentive device: threat of firing. Given the option, it turns out that firms are able to credibly promise to reward effort with bonuses, so that the bonus substitutes for threat of firing as an incentive device. Thus, our findings suggest an explanation for the weak impact of EPL observed in the field: firms may be able to circumvent much of the negative effects of EPL by using bonus payments. In fact, we show that if firms are given the option, they endogenously make more use of bonuses in the presence of EPL. Given the salutary effect of the bonus option, it is natural to investigate whether it also improves market efficiency even in the absence of EPL. We find that bonuses perform better than wage contracts in early market periods, when most interactions are one-shot. In the long-run, however, when relationships have had time to develop and workers are faced with a meaningful firing threat, wage contracts are equally efficient.
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This paper analyzes the impact of formal training on worker mobility. Using data from the Swiss Labor Force Survey, we find that on-the-job search activities and, to a smaller extent, actual job separations are significantly affected by both employer-provided and general training. Moreover, while the separation probability of searching workers is strongly affected by previous firmprovided training, no such effect shows up for non-searchers. This is consistent with the hypothesis that workers bear most of the cost of specific training.
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Social Security Programs and Retirement around the World represents the second stage of an ongoing research project studying the relationship between social security and labor. In the first volume, Jonathan Gruber and David A. Wise revealed enormous disincentives to continued work at older ages in developed countries. Provisions of many social security programs typically encourage retirement by reducing pay for work, inducing older employees to leave the labor force early and magnifying the financial burden caused by an aging population. At a certain age there is simply no financial benefit to continuing to work. In this volume, the authors turn to a country-by-country analysis of retirement behavior based on micro-data. The result of research compiled by teams in twelve countries, the volume shows an almost uniform correlation between levels of social security incentives and retirement behavior in each country. The estimates also show that the effect is strikingly uniform in countries with very different cultural histories, labor market institutions, and other social characteristics.
Article
It is by now widely recognized that investment decisions play a major role in the determination of individual age-earnings profiles. The purpose of this paper is to present a simple life-cycle model of investment in human capital in which leisure choices are explicitly incorporated. In so doing, we integrate two previously disparate branches of life-cycle theory: models of labor supply with exogenous wages, and models of human capital formation with exogenous leisure. Of course, to accomplish this, we must posit utility maximization as the individual's goal rather than income maximization.
Article
As a consequence of the rapid growth of temporary agency employment in Germany, the debate on the remuneration of temporary agency workers has intensified recently. The study finds that the earnings gap of temporary help workers in Germany is indeed large and increased during the past decade. Decomposition reveals that the widening gap mainly is driven by changes in relative skill prices and less by differences in the workforce composition. Temps already have to accept a marked earnings decline before entering the temporary help sector. Nevertheless, after leaving the sector temporary help workers no longer have to accept a pay penalty. A recent reform set a high incentive for temporary help agencies to pay their workers according to a collective agreement. Surprisingly, the unionization of the sector could not bring thewidening earnings gap to a halt.
Article
This article reviews the literature on the relationship of economic growth to the education levels of the labor force. The emphasis is on Yoram Ben-Porath's contribution to some of the issues in this field: the endogeneity of schooling, the role of the public sector as an 'absorber' of educated labor, and the importance of personal human capital created by investments in reputation and personal relationships, the F-connection. Copyright 1997 by University of Chicago Press.
Article
Using the European Community Household Panel, we investigate gender differences in training participation over the period 1994-1999. We focus on lifelong learning, fixed-term contracts, part-time versus full-time work, public/private sector affiliation, and educational attainment. Women are typically no less likely than men to train. While there is no significant training-age profile for women, there is a negative profile for men. In several countries there is a negative association between fixed-term contacts and training, particularly for men. In most countries and, for both sexes, training is positively associated with public sector employment and high educational attainment. (JEL: J16, J24, J40) Copyright (c) 2004 The European Economic Association.
Article
This is the introduction to and summary of the second stage of a international research project to study the relationship between social security provisions and retirement. The project relies on the analyses of a large group of economists in 12 countries who conduct the analysis for each of their countries. In the first stage we documented the enormous disincentives for continued work at older ages in many countries. The introduction to the first volume from the project concluded with a striking graph showing a strong relationship across countries between social security program incentives to retire and the proportion of older persons out of the labor force. The results in this volume show the large magnitude of these effects. Across 12 countries with very different social security programs and labor market institutions, the results consistently show that program incentives accord strongly with retirement decisions. The magnitude is illustrated by the simulations reported in each country paper. Considering the average across all countries, a reform that delays benefit eligibility by three years would likely reduce the proportion of men 56 to 65 out of the labor force between 23 and 36 percent, perhaps closer to 36 percent in the long run. On the other hand, an illustrative common reform'-- with early retirement at age 60, normal retirement age 65, and actuarial reduction in benefits between 65 and 60--has very disparate effects across the countries, depending on the provisions of the current program in each country. There is a strong correspondence between the simulation results and a priori expectations. The results leave little doubt that social security incentives have a strong effect on retirement decisions. And the estimates show that the effect is similar in countries with very different cultural histories, labor market institutions, and other social characteristics. While countries may differ in many respects, the employees in all countries react similarly to social security retirement incentives. The simulated effects of illustrative reforms reported in the country papers make clear that changes in the provisions of social security programs would have very large effects on the labor force participation of older employees.
Article
Using data from the German Socio Economic Panel, I describe the incidence, attributes, and outcomes of continous training received by workers in Germany between 1986 and 1989. Further training is primarily a white collar phenomenon, it is concentrated among the more highly educated, in the service sector and in public administration.
Article
This paper is an empirical investigation of the complementarity between education and training in 13 European countries, based on the European Community Household Panel (ECHP). After confirming the standard result that training incidence is higher among individuals with more education, I find that the relationship between educational attainment and training incidence varies significantly across countries and birth cohorts. I show that individuals have a higher training incidence in countries with a more educated labor force, a less stratified schooling system, a higher union density and a lower value of the Kaitz index. I also find evidence that individuals with more education and limited labor market experience enjoy higher private returns from recent training than individuals with the same experience and less education. More experienced individuals with higher education, however, have lower returns from recent training than less educated workers with the same experience.
Article
This paper considers the sources of skill formation in a modern economy and emphasizes the importance of both cognitive and non-cognitive skills in producing economic and social success, and the importance of both formal academic institutions and families and firms as sources of learning. Skill formation is a dynamic process with strong synergistic components. Skill begets skill. Early investment promotes later investment. Non-cognitive skills and motivation are important determinants of success and these can be improved more successfully and at later ages than basic cognitive skills. Methods currently used to evaluate educational interventions ignore these non-cognitive skills and therefore substantially understate the benefits of early intervention programmes and mentoring and teenage motivation programmes. At current levels of investment, American society under-invests in the very young and over-invests in mature adults with low skills.
Article
This paper explores the consequences of cognitive dissonance, coupled with time-inconsistent preferences, in an intertemporal decision problem with two distinct goals: acting decisively on early information (vision) and adjusting flexibly to late information (flexibility). The decision maker considered here is capable of manipulating information to serve her self-interests, but a tradeoff between distorted beliefs and distorted actions constrains the extent of information manipulation. Building on this tradeoff, the present model provides a unified framework to account for the conformity bias (excessive reliance on precedents) and the confirmatory bias (excessive attachment to initial perceptions).
Article
This survey organises and summarises existing theoretical and empirical work on training. The theoretical models focus on investment efficiency, finance, and turnover. Recent developments in the training literature are characterized by strategic interaction between employers and employees, and emphasize market imperfections. The empirical implications of this literature are limited and difficult to test because they are based on constructs that are not readily observed. This is reflected by the empirical literature.
Article
This paper explores the nexus between work-related training and labour market "flexibility" (which we proxy by contract type, part-time employment, and lack of union coverage), using the first five waves of the British Household Panel Survey (BHPS) conducted over the period 1991-1995. Our results show that workers on short-term employment contracts, who are working part-time, or who are not covered by a union collective agreement, are significantly less likely to be involved in any work-related training to improve or increase their skills. These findings suggest that there is a trade-off between expanding the more marginal forms of employment, and expanding the proportion of the workforce getting work-related training. Keywords: Labour market flexibility, skills acquisition, work-related training, panel probits. JEL Classification: J24 * Paper presented at the British Association for the Advancement of Science Meetings (Economics Section) in Leeds, 10-11 September 1997, under the ti...
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