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The Effect of Early Retirement Incentives on the Training Participation of Older Workers
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..
... 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. ...
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. ...
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. ...
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
... The variable importance of years of work experience and age were relatively higher for formal AET participation than non-formal AET or informal learning participation. Previous studies have shown a significant "age-participation effect" (Fouarge & Schils, 2009); all else being equal, the willingness to invest in LLL tends to decrease as people age. Similarly, in an United Kingdom study in 2017, the younger the age, the higher the participation rates found for formal AET (Egglestone et al., 2018). ...
With the recent shifts in the global economy, many scholars and policymakers are in broad agreement on the importance of lifelong learning practices in the occupational sphere. In response, there has been growing academic interest in adult education participation in which working adults acquire knowledge and skills to fulfill the ever-changing needs of the world of work. Many researchers have revealed that participating in adult education provides a wide array of benefits for individuals, organizations, and society. Yet, despite the increased research efforts, empirical findings are still inconclusive on what contextual factors most decisively or relatively importantly contribute to determining and patterning working adults’ participation in adult education. In this context, this study is conducted to present a holistic picture of adult education participation. To that end, the purpose of this study is to re-examine the determinants and patterns of adult education participation of working adults by leveraging emerging analytic techniques to capture population-level insights on (1) what drives participation in adult education and (2) how discrete patterns in adult education participation emerge.
The data is drawn from the 2017 U.S. Program for the International Assessment of Adult Competencies (PIAAC). The total sample size was 1,283 respondents aged 25 to 65 years old who had work experience in the last 12 months. Outcome measures were formal adult education and training (AET), non-formal AET, and informal learning, all of which indicate three major pillars of adult education participation. The selected 19 independent variables represent working adults’ individual-level (i.e., demographic information, human capital, and learning-related socio-psychological states) and work-related contexts. Through the random forest classifiers (RFCs) technique, one of the machine learning algorithms, this study identified important factors associated with participation in adult education. In addition, latent class analysis (LCA) was applied to investigate discrete patterns of adult education participation among sub-groups of working adults that share similar profiles of individual-level and work-related characteristics.
According to the results obtained from RFCs models, first, skills proficiency and/or utilization appeared to be the far most critical influencers across every type of adult education participation. Second, education level and monthly income were the common salient predictors across types of adult education participation. Third, predictors explaining adult education participation somewhat varied depending on the types of adult education. By applying the LCA approach, this study identified four latent classes of working adults in adult education participation: (1) low-participation learners, (2) high-participation learners, (3) informal learners, and (4) structured learners. Moreover, the results demonstrated that the broader separation of working adults’ participation in adult education itself was strongly affected by situational and institutional contexts, whereas individual preference or selection across types of adult education relies on personal demographics and human capital. Based on the findings, this study concluded with several discussions and implications for research, policy, and practice.
... Early retirement schemes are costly and thus only sensible in circumstances where a successful reintegration into the workforce is highly improbable. Moreover, generous early retirement schemes can discourage older workers from taking part in labor market training, which would help workers to stay in the labor market (Fouarge and Schils 2009). ...
The rise of new technologies has been a defining feature of advanced capitalist countries over the last decades, reigniting concerns about the future of work, rising inequality, and technological unemployment. While there is little doubt that rapid technological progress has far-reaching economic, social, and political consequences, little is known about viable and effective policies governments can implement to assist workers and communities in adjusting to a fast-changing economic landscape and rising labor market insecurity. This paper focuses on the ability of public policies to moderate technology-induced labor market vulnerability and its well-documented political downstream consequences. First, I suggest to theoretically classify policy responses according to their intended goal into a three-fold typology, distinguishing between investment, steering, and compensation policies. After that, I provide a detailed discussion of the current state of the empirical literature on how such policy responses affect workers coping with technological change. In the last section, I discuss to what extent these findings can guide the adoption of policies to help workers adapt to technological change and point out potential avenues for future research.
... 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. ...
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.
... 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). ...
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. ...
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). ...
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. ...
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]. ...
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.
... 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. ...
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.
... 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). ...
This chapter considers demographic changes and the implications of new life course patterns for higher education, workforce dynamics and public policy. In Ireland, as in most developed countries, as people live longer additional challenges, but also opportunities, arise as many may wish to work longer – whether by choice or necessity. In this context, the centrality of lifelong learning for people of all ages is explored. Intergenerational differences and resulting later life inequalities are considered, with a particular focus on the potential role which higher education can play in enhancing knowledge and skills across different stages of the life course. A case is made for the potential contribution which older people can make in terms of workforce diversity, intergenerational learning and meeting skill gaps. The need to address some misconceptions associated with older workers (and, by association, older learners) is also explored. Finally, the role of public policy is discussed in supporting higher education providers, employers and individuals to prepare for changing life course patterns, while also addressing persisting inequalities. We conclude by highlighting the potential value of comparative research in this arena.
... This statement is backed up by a previous researcher in which each organization needs to see the preparation of the training programme to be a return in the future [11]. It is also supported by previous researchers who found that training returns will be visible when staff productivity increases and profitability of the organization's income increases [34,55]. Additionally university commitment in seeing the importance of training and giving staff the opportunity to choose their own training is one of the high-value university commitments. ...
Training was created for the purpose of focusing on the improvement of specific work skills. Many organizations are now more likely to emphasize the aspects of training and development as a way to promote the development of workers to achieve a highly skilled workforce. In order to realize that aspiration, staff participation in training programs is essential to achieve the objectives and goals set. In line with these requirements, the study aims to continuously explore the factors that influence the participation of academic staff of the Malaysian public universities in programme training. This study has been using a qualitative method where (7) seven training officers from Universiti Awam Malaysia have been interviewed. The data obtained were analysed using Nvivo10 application. Based on the analysis, four major factors were found to have influenced the participation of academic staff in programme training. It consists of individual factors, training, organization and work factors. It is hoped that the findings of this study will benefit and be used by any stakeholders in enhancing knowledge in the topics studied.
... 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. ...
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).
... 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 ...
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.
... 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. ...
... 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). ...
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.
... 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). ...
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.
... 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 ...
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.
... 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. ...
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). ...
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. ...
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.
Motivation
Skills formation and training have been singled out as key policies to adapt to contemporary labour‐market challenges such as automation and skill‐biased technological change particularly in middle‐income countries such as those in Latin America. However, limited knowledge about the effects of training policies in Latin America hinders adaptation to these transformations.
Purpose
This article contributes to the limited knowledge to date about the impact of skills formation in Latin America, with reference to Chile, a country usually considered a successful case of educational achievement and employment but sharing many of the development problems of its Latin American peers. By doing this, it provides empirical evidence to substantiate existing theories explaining these problems.
Methods and approach
Using available longitudinal data from Chile (Encuesta de Protección Social, EPS), we analyse the causal effects of training on the transitions from unemployment to employment through a difference‐in‐difference (DiD) strategy.
Findings
Results suggest that there is a small but significantly positive effect of training in reducing post‐training unemployment, as yearly unemployment among individuals attending training while unemployed is reduced, on average, by two weeks.
Policy implications
Results confirm the low and highly segmented incidence of training in the region, highlighting the need to discuss the design of training programmes to improve their effects, including the creation of differentiated programmes for unemployed and employed workers. For the former, it is important to strengthen labour intermediation to overcome problems of social capital; for the latter, it is key to achieve the stronger incorporation of employers in the discussion on training and industry standards. In both cases, it is crucial to create institutions promoting stronger co‐ordination between the interested actors.
Labour markets are currently undergoing tremendous challenges. Automation, skilled-biased technological change, or offshoring are transforming challenges and opportunities for workers. In this context, international organizations have highlighted the crucial role of labour market policies and institutions, particularly but not exclusively re-training and skills formation policies, to cope with the said transformations and allow individuals to better adapt and benefit from them (for example, ILO 2017; OECD 2019). Existing research on the effects of labour market changes and skills formation has concentrated on advanced economies. There is limited knowledge about the impact of skills formation and training in Latin America (ILO 2016), in part due to a lack of information and data on training programmes, particularly longitudinal data. In this paper, we analyse the effects of training on labour market transitions in Chile, using available longitudinal data. We focus on the transitions from unemployment to employment and between different types of employment. Using individual-level panel data spanning seven years of individuals’ work trajectories and training instances, we estimate the average effect of attending training courses while unemployed on individuals' yearly ratio of unemployment. In addition to this, we explore whether training improves the probability of workers changing occupational categories. Our results suggest that there is a small but still significantly positive effect of training in reducing post-training unemployment events. For employed workers, results show how training occurs mostly among highly educated workers or workers in very specific occupations, which limits the potential equalizing effects of training policies.
Zusammenfassung
Personen in der späten Erwerbsphase sind in Europa selten in berufliche Weiterbildung eingebunden. Der Beitrag betrachtet Länderdifferenzen in der Weiterbildungsteilnahme Älterer aus institutionentheoretischer Perspektive und berücksichtigt dabei, dass Institutionen in Verbindung miteinander funktionieren. Daher werden Zusammenhänge zwischen institutionellen Konfigurationen des Arbeitsmarktes und Bildungssystems für die relativen Weiterbildungsnachteile Älterer in 26 europäischen Ländern untersucht und es wird aufgezeigt, dass institutionelle Konfigurationen eine hohe Bedeutung für die Erklärung von Weiterbildungsdisparitäten besitzen. Für geringe Weiterbildungsnachteile Älterer sind insbesondere das Vorhandensein weitreichender staatlicher und betrieblicher Weiterbildungsstrukturen sowie ein duales Berufsausbildungssystem bedeutsam.
Institutional contexts shape learning participation throughout the course of life. Combining micro-data on adult education from 26 European countries with country-level indicators on retirement systems in multi-level logistic regression models, the focus is on analysis of participation in non-formal learning among people aged 50–64 and its interactions with retirement policies. The analysis makes use of the largest sample of European countries used so far for exploring the issue. For the first time, gender differences in retirement policies are considered. The results imply that for all women and highly educated men, participation in non-formal training is higher when retirement age in the country is set at 65 years or higher. However, men with less education do not profit from a higher retirement age because their training participation remains unaffected by retirement policies. In the current analysis, training participation in older age groups remains unaffected by the generosity of pensions. The results outline gender differences in learning participation in older age groups. Also, after the age of 50, men with a low education are at particular risk of labour market exclusion and unemployment because the retirement age in European countries keeps rising and technological advancements make additional demands on workers’ skills.
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.
This article contributes to research on older workers' sustainable employment by investigating the relation between training and expected retirement age. Past research has produced inconsistent findings, partly because studies rarely distinguish between the effects of training opportunities and actual training participation. To address this limitation, we examine the incremental effect of training opportunities over and above actual training participation. Grounded in social exchange theory, we argue that the effect of training opportunities on expected retirement age depends on employees' positive reciprocity orientation. Using matched employer–employee data (880 employees matched to 284 employers) our findings show that training opportunities associate with expected retirement age over and above employees' actual training participation, but only for employees with strong positive reciprocity beliefs. Moreover, a supplementary analysis showed that the strengthening effect of positive reciprocity only holds for organizations that are financially healthy. These findings are consistent with the idea that positive reciprocators will only avoid early retirement as a response to training opportunities when it is seen as a credible gesture to facilitate employees' future employability.
Resumen
La retención en las empresas de los trabajadores de más edad podría paliar carencias de capital humano derivadas del rápido envejecimiento de la población activa. Con datos de emparejamientos empresa‐asalariado de Alemania, de 2002–2008, los autores investigan la relación entre formación en la empresa, salarios y decisiones de jubilación de los trabajadores de 50–65 años y encuentran que cuando la formación está adaptada a estos trabajadores, las mujeres, sobre todo de bajos ingresos, son menos proclives a jubilarse, posiblemente por un crecimiento salarial concomitante. Este tipo de formación podría pues contribuir a retener y promover a las mujeres de edad y de bajos ingresos.
Résumé
Une vague de départs à la retraite s'annonce en Allemagne, qui privera les entreprises d'une main‐d'œuvre parfois difficile à remplacer. Dans ce contexte, les auteurs s'intéressent à l'apport de la formation en entreprise, recherchant une corrélation entre formation, salaire et probabilité de départ. Ils montrent que cette probabilité diminue lorsque l'établissement propose des programmes de formation spécifiques pour les seniors mais seulement au sein des effectifs féminins – et surtout parmi les bas salaires –, sans doute sous l'effet de la progression salariale. Les formations ciblées pourraient donc encourager les femmes faiblement rémunérées à rester actives plus longtemps, améliorant ainsi leurs perspectives de carrière.
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.
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.
Two hypotheses are tested: (1) education and training increase the employability of workers at other tasks within the firm and reduce the need for help from supervisors when workers encounter small problems, and (2) greater employability and problem solving capability increase wages. The empirical results show that greater employability and problem solving capability are independent from each other. Formal work-related training increases employability. Workers in jobs requiring no induction training are less employable at other jobs or departments. Both general and specific human capital increase the ability of workers to solve problems on their own. Greater employability does not increase wages. Male workers who solve problems on their own earn more than men who need help from others. The effects of human capital variables on employability and problem solving capability do not differ between and men and women. However, it is found that the ability to solve problems on one's own has a pay off for men but not for women.
While the importance of on-the-job training is recognized by everyone, it is a phenomenon that is very difficult to study. Most training is informal and hard to measure and its effects on productivity are even more difficult to quantify. An elegant theory explaining how the quantity of training is determined and who pays for and benefits from it has been available for more than a third of a century (Becker 1962). However, the absence of data on the key theoretical constructs of the theory--general training, specific training, informal training and productivity growth--means that the only predictions of the theory that have been tested relate to the effects of formal training and tenure (interpreted as a proxy for informal training) on wage growth and turnover. Until recently, definitive tests of the OJT theory were infeasible because the large number of unobservables meant that any given phenomena had many alternative explanations (Garen, 1988). New data sets with improved measures of OJT are at last becoming available and consequently there has been a good deal of progress recently in testing OJT theory. This paper provides a review of this work.
One measure of the health of the Social Security system is the difference between the market value of the trust fund and the present value of benefits accrued to date. How should present values be computed for this calculation in light of future uncertainties? We think it is important to use market value. Since claims on accrued benefits are not currently traded in financial markets, we cannot directly observe a market value. In this paper, we use a model to estimate what the market price for these claims would be if they were traded. In valuing such claims, the key issue is properly adjusting for risk. The traditional actuarial approach – the approach currently used by the Social Security Administration in generating its most widely cited numbers - ignores risk and instead simply discounts “expected†future flows back to the present using a risk-free rate. If benefits are risky and this risk is priced by the market, then actuarial estimates will differ from market value. Effectively, market valuation uses a discount rate that incorporates a risk premium. Developing the proper adjustment for risk requires a careful examination of the stream of future benefits. The U.S. Social Security system is “wage-indexedâ€: future benefits depend directly on future realizations of the economy-wide average wage index. We assume that there is a positive long-run correlation between average labor earnings and the stock market. We then use derivative pricing methods standard in the finance literature to compute the market price of individual claims on future benefits, which depend on age and macro state variables. Finally, we aggregate the market value of benefits across all cohorts to arrive at an overall value of accrued benefits. We find that the difference between market valuation and “actuarial†valuation is large, especially when valuing the benefits of younger cohorts. Overall, the market value of accrued benefits
This paper examines the main determinants of the decision to retire from the labour market in OECD countries, and in particular the role of social security systems in driving down the labour-force participation rate of older people in recent decades. It demonstrates that old-age pension systems in virtually all OECD countries in the mid-1990s made it financially unattractive to work after the age of 55, and the implicit tax on continued work has risen strongly since the 1960s in most countries. Financial disincentives to continued work have been amplified by various de facto early-retirement programmes, including unemployment-related and disability schemes. Pooled cross-country time-series regressions show that increased disincentives to work at older ages have contributed significantly to the drop in labour-force participation rates of older males, but also demonstrate that the deterioration of labourmarket conditions in many countries has played a significant role as well ...
Cet article examine les principaux déterminants de la décision de quitter le marché du travail, dans certains pays de l’OCDE, et en particulier le rôle des systèmes de sécurité sociale dans la diminution du taux d’activité des personnes âgées dans les dernières décennies. Il démontre que dans quasiment tous les pays de l’OCDE au milieu des années 90, les systèmes d’assurance-vieillesse ont rendu financièrement peu attrayant le fait de travailler après 55 ans, et que l’impôt implicite sur la poursuite de l’activité a fortement crû depuis les années 60 dans la plupart des pays. Les contre-incitations financières à la poursuite du travail ont été amplifiés par divers programmes de retraite anticipée, parmi lesquels des systèmes liés au chômage et à l’invalidité. Les régressions des séries chronologiques transversals regroupées montrent que des contre-incitations accrues à travailler à un âge tardif ont significativement contribué à la baisse du taux d’activité des hommes âgés, mais ...
This paper reviews the existing evidence on workplace training in Europe in different data sources - the CVTS, OECD data and the European Community Household Panel. We outline the differences in training incidence and relate these differences to the private costs and benefits of training, and to institutional factors such as unions, employment protection and product market competition. We ask whether there is a case for under-provision of training in Europe and examine alternative policies aiming both at raising training incidence and at reducing inequalities in the provision of skills.
While the effect of social security systems on retirement decisions has received much attention, there are no analytical results on the impact of these systems on individual incentives to invest in human capital. We integrate human capital investment and retirement decisions in an analytical life-cycle model with full certainty and investigate how different social security schemes may affect human capital investment and labor supply. We analyze and compare three different social security systems, differing on whether benefits are conditional on withdrawal from the labor market and on previous income.
Previous empirical studies on the effect of age on productivity and wages find contradicting results. Some studies find that if workers grow older there is an increasing gap between productivity and wages, i.e. wages increase with age while productivity does not or does not increase at the same pace. However, other studies find no evidence of such an age related pay-productivity gap. We perform an analysis of the relationship between age, wage and productivity using a matched worker-firm panel dataset from Dutch manufacturing covering the period 2000-2005. We find little evidence of an age related pay-productivity gap.
Despite many approaches of neoclassical and endogenous growth theory, economists still face problems in explaining the reasons for income differences between countries. Institutional economics and the deep determinants of growth literature try to depart from pure economic facts to examine economic development. Therefore, this article analyzes the impact of institutions, geography, and integration on per capita income. Concerning theoretical reasoning, emphasis is on the emergence of institutions and their effect on economic growth. However, institutions can appear in different shapes since political, legal, and economic restrictions are not the only constraints on human behaviour. Norms and values also limit possible actions. Therefore, a differentiation between formal and informal institutions is made. Informal institutions are defined as beliefs, attitudes, moral, conventions, and codes of conduct. Property rights are assumed to be the basic formal institutional feature for economic success. Despite their direct impact on growth through individual utility maximization, property rights also make a statement concerning the political and legal environment of a country. Regarding the regression analysis, different religious affiliations are used as instrumental variables for formal and informal institutions. The regression results affirm a crucial role of informal and formal institutions concerning economic development. However, a high proportion of Protestant citizens encourage informal institutions that support economic growth, while a high Muslim proportion of the population is negatively correlated with growth-supporting formal institutions. --
In real estate, the three most important factors determining the value of property are "location, location, location." In determining the employment outlook for 1999 graduates, the watchwords are "the economy, the economy, the economy." Although the 1999 job market could be as good as it was in 1998—which was the best on record for the 1990s—it could also be dampened by an ailing global economy. In this annual examination of career opportunities for chemists and chemical engineers, C&EN finds an overall optimistic outlook for both industrial and academic hiring. However, on the industrial scene, the robust recruiting occurring currently on college campuses is tempered by the realization that a further downturn in the economy could cause some of the companies to pull back on hiring plans. The academic job market will continue to gather steam as retirements, relocations, promotions, and department expansions open up slots. In academia, however, the cost of bringing a faculty member ...
In this chapter we review the economic literature on the various causes of skills obsolescence and the ways in which skills obsolescence has been modelled or estimated. Most of the literature focuses on skills obsolescence due to atrophy and worker displacements. Skills obsolescence may, however, also be due to the wear of skills, technological and organizational developments, shifts in the structure of employment and organizational forgetting. In the second part of the chapter, we discuss measures for skills obsolescence. Skills obsolescence measures are related to both the cause of skills obsolescence and the way in which it manifests itself.
Facilitating is a different approach to learning from the more traditional didactic and Socratic approaches. As a facilitator, the teacher plays the role of enabler so that students are able to learn more by themselves. In this mode teacher and learners become interdependent and draw upon such resources as their experience, their knowledge, their own learning styles etc Before harnessing these resources a number of factors need to be considered which influence whether facilitating is an appropriate method. Additionally, the use of a facilitative style has a number of implications for the training organization, teacher and students in terms of planning, development of expertise and building confidence to use such an approach.
We compare the incidence of training and the changing correlation of training with age for high and low skilled German workers between 1996 and 2004. Not only do highly skilled workers receive more training than low skilled workers at any point in time, also the increase in the provision of training disproportionately benefited those with high skills. Thus education and training appear to be complements and the gap in labor market performance between skill groups can be expected to widen over time. The share of training provided to older workers, particularly high skill older workers, increased substantially.
In this article we investigate whether early retirement patterns vary between countries with distinct early retirement systems.
By choosing countries that differ not only with respect to the coverage and generosity of publicly provided pensions but also
with respect to the extent to which the state interferes in the non-public pillars of pension provision, we analyse to what
extent such issues have an effect on individual early retirement behaviour. Selectivity effects are expected to be stronger
in countries with highly fragmented public systems or private early retirement schemes. By pursuing a shift to more private
pension provisions, governments might unintentionally create more inequality in early retirement opportunities among the population.
For the analysis we use longitudinal data, i.e. British Household Panel Study (BHPS) 1991–2004 (the United Kingdom), the German
Socia-Economic Panel (GSOEP) 1990–2005 (Germany, and the Socia-Economics Panel (SEP) 1990–2001 (Netherlands) and a discrete-time
competing-risks model. The results suggest that pursuing a shift from public to private early retirement schemes can lower
the incidence of early retirement. Yet, at the same time, early retirement can get more selective in that only the higher
paid are able to afford it.
Demonstrates that technical change is attributable to experience. The cumulative production of capital goods is used as the index of experience. New capital goods are assumed to completely embody technical change. The assumption is made that the model will be operating in an environment of full employment although reference is made throughout to the case of capital shortage. The implications of this model on wage earners are discussed, and profits and investments are examined. The rate of return is determined by the expected rate of increase in wages, current labor costs per unit output, and the physical lifetime of the investment. Learning is an act of investment that benefits future investors. Further analysis shows that the socially optimal ratio of gross investment to output is higher than the competitive level. (SRD)
How has lifelong learning become a reality in the lives of the Finns? One of the premises of the discussion in this article is that participation in education and learning can be viewed as a form of social participation, as part of the social order and institutional patterns of action. The Finnish Adult Education Survey 1995 (AKU-95) and the first International Adult Literacy Survey (IALS) of 12 countries that same year (Blomqvist et al., 1997; Belanger & Tuijnman, 1997, pp. 249-258) provide the basic data. (1) In addition, we used publications based on the above and earlier data from participation surveys. The qualitative data are provided by a biographical study on the meaning of education and learning for Finns (Antikainen et al., 1995; Antikainen & Huotelin, 1996). Lifelong learning refers not only to life-long, but also to life-wide learning. Ever since its introduction, it has defined various forms of learning which are usually classified according to the purposefulness and planning of the learning and to whether it takes place in an environment constructed for it or in another milieu. Formal education will thus be differentiated from non-formal or nondegree training which typically takes place in adult education and work. The third form is informal or consists in everyday learning in different environments such as home, work and leisure activities. Since all learning cannot be assigned to only one of the above, the formal/non-formal dichotomy will be used as an additional dimension.
Using data from the German Socio Economic Panel, I analyze the incidence, financing, and returns to workplace training in
Germany for the years 1986 to 1989. Much of this training seems general, and is provided to workers by their employer at no
direct cost. While workers typically report larger productivty gains from the training during work hours, such training has
lower returns than training undertaken during leisure time. Workers with higher earnings growth seem more likely to participate
in training. I deal with this selection problem by estimating models that allow for inidividual level heterogeneity in earnings
growth rates.
In this paper a distinction is made between human capital depreciation related to a worker's aging and depreciation due to the obsolescence of the worker's education. Schooling-specific obsolescence of human capital is incorporated in the Mincerian model of earnings, and it is shown how this obsolescence affects the worker's earnings profile. Using the Israeli 1983 Census we show that for ‘high-tech’ oriented industries (for which obsolescence is relatively important) obsolescence effects are more significant than for ‘low-tech’ oriented industries, and, consequently, the experience-earnings peak falls faster with increasing education in the former.
This paper presents a parameter covariance matrix estimator which is consistent even when the disturbances of a linear regression model are heteroskedastic. This estimator does not depend on a formal model of the structure of the heteroskedasticity. By comparing the elements of the new estimator to those of the usual covariance estimator, one obtains a direct test for heteroskedasticity, since in the absence of heteroskedasticity, the two estimators will be approximately equal, but will generally diverge otherwise. The test has an appealing least squares interpretation.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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).
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.
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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