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What makes older workers more attractive for employers?! ! ! Presentation for OECD’s “Older workers” review! ! ! 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!