Older Workers - Netherlands

AGEING AND EMPLOYMENT POLICIES

THE NETHERLANDS

WORKING BETTER WITH AGE

Dutch Ministry of Social Affairs and Employment,Wednesday 16 April 2014

Stefano ScarpettaDirector for Employment, Labour and Social Affairs, OECD

Outline of the presentation

• The labour market situation of older workers in the Netherlands

• Key recommendations for the Netherlands

• Working Better with Age: the OECD review

THE LABOUR MARKET SITUATION

OF OLDER WORKERS

IN THE NETHERLANDS

The effective labour market exit age in the Netherlands has reached the OECD average

Source: OECD

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

50

55

60

65

70

75

80

Netherlands OECD country with highest age OECD country with lowest age OECD average

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

50

55

60

65

70

75

80

Men Women

The employment rate of 55-64s in the Netherlands is above the OECD average

Employment rates (55-64), 2007 and 2013

As a percentage of the population aged 55-64

Turkey

Sloven

iaGree

ce

Hungar

y

Luxem

bourg

Poland

Belgium Ita

lySpa

in

Slovak

Republi

cAus

triaFran

ce

Portuga

lEU

Irelan

d

Czech

Republ

icOECD

Mexico

Finland

United

Kingdo

m

Netherl

ands

Canada

United

States

Austral

ia

Denmark

Estonia

German

yChil

eKore

aIsr

aelJa

pan

Norway

Switzerlan

d

Sweden

New Zeal

andIce

land

0

10

20

30

40

50

60

70

80

90

2013 2007

Source: OECD estimates based on national labour force surveys.

… but lags behind concerning working after 65

Employment rates (65-69), 2007 and 2012

As a percentage of the population aged 65-69

Source: OECD, Working Better with Age, Netherlands – Figure 2.1.

ISLKOR

NZLMEX

JPN

CHLISR

USAEST

AUSNOR

CANPRT

CHETUR

GBRSWE

OECD IRLDNK

NLD FINEU21 DEU

POLCZE

AUT ITASVN

GRCLU

XFRA

HUNESP

BELSVK

0

10

20

30

40

50

60

2012 2007

A strong part-time culture in the Netherlands: 66% of women and 16% of men aged 55-64 work part-time compared with respectively 29% and 10% in OECD average

Part-time work, 2012 As a percentage of employment in the age group

SVKCZE

ESPEST

HUNUSA

GRCPOL ISR

LUX

DNKSVN

FRADEU EU

SWEKOR ISL

ITACAN

OECDAUT

NZLNOR

JPN

BELCHL

AUS IRLFIN

PRTMEX

GBRTUR

NLD CHE

0

10

20

30

40

50

60

70

55-64 25-54

SVKHUN

CZEEST

GRCUSA

KORSVN

SWEPOL

DNK FINESP

PRT ISLISR

CANFRA EU

CHLOECD

NOR ITANZL

MEXTUR

AUSAUT

LUX

JPN

DEUBEL

GBR IRLCHE

NLD

0

10

20

30

40

50

60

70

Men

Women

Source: OECD, Working Better with Age, Netherlands – Figure 5.9.

Full-time equivalent employment rates of 55-64s are lower than the OECD average, particularly for women

Employment rates (55-64) (%) adjusted by working hours, 2012

Source: OECD estimates based on national labour force surveys.

Turkey

Sloven

ia

Belgium Ita

ly

Greece

Austria

Luxem

bourg

Poland

Netherl

ands

Irelan

d

Hunga

rySpa

in

Slovak

Republi

cMexi

co EUFran

ce

Portug

al

Czech

Republ

ic

United

Kingdo

mOECD

Switzerla

nd

German

y

Austra

liaChil

e

Canad

a

Denmark Isr

ael

United

States

Finlan

d

Norway

Korea

New Zeal

and

Estonia

Sweden

Icelan

d

0

10

20

30

40

50

60

70

80

Full-time equivalents Raw

Sloven

ia

Hunga

ry

Belgium

Luxem

bourg

France Ita

ly

Portug

al

Poland

Greece

Turkey

Spain

Austria

Finlan

d

Slovak

Republi

cIre

land EU

Estonia

Netherl

ands

Denmark

Czech

Republ

icOECD

Canad

a

United

Kingdo

m

United

States

German

yNorw

ay

Austra

lia

Sweden

Switzerla

ndIsr

ael

New Zeal

and

Mexico

Korea

Icelan

dChil

e

0102030405060708090

100

Full-time equivalents Raw

Men

Women

Long-term unemployment is high for those above the age of 55

Incidence of long-term unemployment (55+), 2012As a percentage of unemployed aged 55+

KORMEX

CAN ISRNOR

NZLSWE

AUSTUR

JPN

USALU

X FINPOL

DNKOECD

GBRCZE

AUTSVN

EU21 NLD ISLITA

HUNFRA

ESPDEU

ESTGRC

PRTSVK

BEL IRL

0

10

20

30

40

50

60

70

80

Source: OECD, Working Better with Age, Netherlands – Figure 2.2.

The hiring of older workers in the Netherlands is well below the EU average

Hiring rate by age group, 2012a

Percentages

a) For each age group, employees with job tenure of less than one year as a percentage of all employees.Source: OECD, Working Better with Age, Netherlands – Figure 2.6.

BEL LUX GRC NLD ITA SVN NOR IRL SVK ESP CHE AUT EU PRT FRA DEU GBR CZE EST POL FIN SWE ISL DNK HUN TUR0

5

10

15

20

25

30

55-64 25-54

Inflows into disability benefits of 55-64s are lower than in 2002 but there is not enough focus on re-entry to work

Inflows into disability benefits between the age of 55 and 64, by gender, Netherlands, 2002-12

As a percentage of the population in each group

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

Men Women Total

Source: OECD, Working Better with Age, Netherlands – Figure 3.2.

The Dutch age-wage profile of full-time workers is steeper than in Denmark, Sweden and the United Kingdom

Indexes, age 25-29=100, 2010

60

80

100

120

140

160

180

20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64

Denmark

Netherlands

United Kingdom

Sweden

Source: OECD Earnings Database.

WHAT MORE SHOULD BE DONE IN THE

NETHERLANDS?

In response to the 2005 OECD recommendations, the Netherlands implemented several substantial policy initiatives to encourage work at an older age but there are still challenges

The aims of the review are to:

Assess these policy initiatives and their impact on the employment situation of older workers

Identify areas where more should be done, covering both supply-side and demand-side aspects

Working Better With Age: the Netherlands

• Promote longer contribution periods in second-pillar pension schemes and increase flexibility in withdrawal and combinations of pension and work to encourage longer careers

• Reduce the maximum duration of UI benefits combined with better activation of all unemployment benefit recipients, including for the unemployed over 60 who are receiving Income Compensation for Older Unemployed (IOW)

• Keep replacement rates of sickness and disability benefits below 100%, and give access to wage-compensation already in the sickness benefit period for re-entry to new jobs with a lower wage

First areaImproving work incentives

• Encourage the social partners to adjust wage setting procedures by focussing more on performance and less on tenure and seniority

• Ensure that new practices among innovative firms in the Sustainable Employability programme are promoted and progressively become national standards

• Better targeting of measures to reduce cost disadvantages, increase employability and promote recruitment of older workers

Second areaTackling employment barriers on the side

of employers

• Link training measures for older unemployed directly to a specific job

• Tighten co-operation between the Public Employment Service and the municipalities to increase re-entry to work for the older unemployed

• Mobilise more fully labour resources by supporting initiatives to facilitate working on a full-time basis or longer working hours for part-time workers

Third areaImproving the employability of older workers

WORKING BETTER WITH AGE

THE OECD REVIEW

The first OECD review on older workers:Live Longer, Work Longer

2003-2006 OECD review

21 country reports (including the Netherlands in 2005):Ageing and Employment Policies

And a synthesis report (2006): Live Longer, Work Longer

Agenda for policy actions in three broad areas to encourage work at an older age:

1. Rewarding work2. Changing employer practices3. Improving employability

• Policy review: recent reforms and measures presented in 21 country notes (situation mid-2012) http://www.oecd.org/els/employment/olderworkers

• 2013 Employment Outlook: focus on changes in labour market outcomes for older workers since the start of the global financial crisis

• Country case studies

– Norway: publication in 2013

– France, Netherlands, Switzerland and Poland: publications in 2014

– Denmark, Korea and Slovenia: publications in 2015

• Policy synthesis report end-2015

Follow-up review: policy review, empirical study and country studies

Thank you!

For further information

http://www.oecd.org/els/employment/olderworkers