Download What makes older workers more attractive for employers?

What makes older workers more attractive
for employers?!
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Presentation for OECD’s “Older workers” review!
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Den Haag, 4 February, 2013!
Arjan Heyma!
www.seo.nl - [email protected] - +31 20 525 1630!
Older workers in the Netherlands!
§  Labour participation 50+ has increased to 65% (2011)!
§  Main reason: reduction of prepension benefits!
§  But: older workers who become unemployed remain
unemployed longer than average in OECD countries!
§  Re-employment probability within 12 months only
equals 20% for a 55-year (CBS, 2012)!
§  And: labour mobility among onder workers is low:
12 thousand out of 252 thousand job-movers are 55+ (2011)!
Research questions!
§  Which barriers prevent employers to hire older workers?!
§  How can these barriers be reduced?!
§  What are economic consequences of policies that reduce
these barriers?!
§  Potential barriers:!
§  Productivity versus wages!
§  Health and disability risks!
§  Age specific labour conditions!
§  Perceptions among employers!
Research method: conjoint analysis!
§  Survey among 1000 managers (including small businesses)!
§  Direct question about preferences may result in socially
desirable answers (stated preferences)!
§  Conjoint analysis: managers make 12 choices between two
hypothetical job candidates at a time (revealed preferences)!
§  Variation in gender, age, level of education, training,
(relevant) work experience, previous tenure!
§  Variation in policy measures with financial and nonfinancial incentives to hire older workers!
§  Variation in economic performance of firm
and in type of labour contract!
Results: employer preferences!
§  Managers prefer younger to older job candidates!
§  Main reason: uncertainty about productivity of more
expensive older workers!
§  Other important preferences:!
§  Relevant work experience may compensate for age!
§  Correct level of education!
§  Older managers hire more older workers!
§  Businesses with older workforce hire more older workers
(conditional on type of industry and size of workforce)!
§  Ageing of workforce may eventually lead to a 33%
increase in job finding rates for 55+!
Result: effect of policy measures!
§  Mobility fee when hiring older workers from social benefits
has some effect (13% higher job finding rate 50+)!
§  General mobility fee for employers has no significant effect!
§  No significant effects for no-risk scheme UI, nor for
reducing extended wage pay for sick older workers, nor for
abolishing experience rating in disability schemes!
§  Doubling regular probationary periods for 55+ employees
lead to 20% increase in job finding rate of 50+!
§  Full wage subsidies in probationary periods for 55+ from
social benefits lead to 20% higher job finding rates for them!
Policy implications!
§  Older workers can be attractive for employers because of
their relevant work experience!
§  Unemployment reduces relevance of work experience:
re-employment declines rapidly for older unemployed!
§  Uncertainty about productivity levels make employers
hesitant in hiring employees with higher wage demands!
§  Financial incentives seem less important than uncertainty
about the match of employees with(in) an organisation!
§  Policy measures to increase the attractiveness of older
workers should be directed towards reducing uncertainty
(e.g. through screening) instead of financial incentives!