Dalen, H.P. van

Henkens, K.

English

Research Papers in Economics

VOLUME 26, SPECIAL ISSUE 1
contents
A publication 
of the
Netherlands
Interdisciplinary
Demographic
Institute
1 Do employers support later
retirement?
5 Children of migrant families
10 More than brains only
12 Population decline and policy
dem s
Volume 26
Special Issue
September 2010
ISSN 0169-1473
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Bulletin
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Population
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E EU UR RO OP PE EA AN N   P PO OP PU UL LA AT TI IO ON N   C CO ON NF FE ER RE EN NC CE E   2 20 01 10 0
SPECIAL ISSUE
Extending people’s working life is seen
as a key element in curtailing the
rising costs of public pensions as well
as the looming labour shortages
associated with an ageing population.
In the countries of the OECD and of
the European Union a host of
initiatives have been taken which aim
to delay retirement and support labour
force participation of older workers. At
the government level, these initiatives
vary from pension reforms and new
legislation. But how do employers
react at the organisational level: do
they support later retirement? To
address this issue we will discuss the
results from survey research among
employers in five European countries:
the Netherlands, the United Kingdom,
Spain, Greece and Hungary.
At the government level initiatives to curtail the rising costs of public pensions and
the looming labour shortages associated with an ageing population vary from pen-
sion reforms that limit early exit routes from the labour market to legislation against
age discrimination and public campaigns to combat negative stereotyping in the
workplace. At the organisational level, employers are urged to develop personnel
policies geared towards increasing the employability of older workers, for instance
through life-long learning. Employers’ opinions and behaviour play a major part in
determining the labour market transitions of older workers. Older citizens must 
obviously be willing and able to work, but whether they actually get the opportunity
depends mainly on employers’ decisions – yet how employers view the changing 
nature of retirement is largely unknown.
In this contribution we focus on employers’ policies towards (later) retirement 
within their own organisation. National employers’ organisations are evidently 
inclined to acknowledge that later retirement in the context of an ageing society is 
inevitable, but how the individual employers view this issue is not widely known.
Besides gaining insight into employers’ behaviour with respect to an ageing work-
force, we will also reflect on how employers view public policies towards raising the
retirement age. 
Increasing the retirement age in Europe
In some European countries (notably the UK, Germany, Sweden and Denmark) the
prospect of an ageing population has led governments to opt for later retirement 
beyond the statutory retirement age of 65. Extending the working life can in that 
Do employers support later retirement?
A view from European employers  
HENDRIK P . VAN DALEN AND KÈNE HENKENS 
316828_Demos_Special Issue_aug_def_2010  24-08-2010  16:05  Pagina 1VOLUME 26, SPECIAL ISSUE 2
respect be seen as a double dividend. Different
national governments have taken a variety of ac-
tions to stimulate older workers to stay in the
labour market and postpone retirement. The
United Kingdom and the Netherlands have 
introduced legislation to combat age discrimina-
tion at work. Especially in the Netherlands this
has resulted in a series of complaints and laws-
uits. Following these lawsuits several collective
labour agreements that contained age-based 
arrangements have been adapted and formu-
lated in an age-neutral way. Also in the
Netherlands, the government has taken several
measures to block the different pathways into 
retirement. All these measures are meant to dis-
courage older workers from leaving the labour
market before the official current retirement age
of 65. The main instrument is the use of financial
disincentives, like higher marginal tax rates on
early retirement benefits, lower unemployment
benefits for older workers and a reduction of
disability benefits for older workers. On a tem-
porary basis, different task forces and expert
groups have disseminated good practices among
organisations in terms of personnel policies for
older workers. In line with the ideas developed
already in some Scandinavian countries and
Germany, the Dutch government plans on 
raising the official retirement age to 67 by 2025.
In a similar way, the Hungarian government has
decided to increase the retirement age for both
women and men from 62 to 65 years. This 
gradual increase will start in 2014 and will be
completed by 2021. In Greece and Spain, where
unemployment rates have been much higher
over the last decade than in the countries of
Western Europe, the focus has been more on
combating unemployment than on measures
that promote continuous employment of older
workers. As a matter of fact, Greece still takes
measures to provide income support for older
workers who cannot find a job after having 
become unemployed, thereby implicitly spon-
soring non-participation of older workers.
Hence the five countries in our study differ 
considerably with respect to the policy stage
they are in, depending to a large extent on the
urgency of labour market shortages and an un-
favourable shift in the ratio between the inactive
and the active population. 
Perception costs and benefits of an ageing
work force
Later retirement may alleviate the public costs
of an ageing society, but how does it affect 
individual organisations? In short, what do 
employers expect the consequences to be of an
ageing work staff? What do they perceive as the
costs and benefits of an ageing work force?
Looking at the perceived consequences of 
an ageing personnel structure, a divide among 
employers becomes visible (see Table 1): British
and Hungarian employers are far more positive
about the possible economic consequences of
an ageing personnel structure, whereas Greek,
Spanish and Dutch employers see predomi-
nantly negative consequences. 
Of the specific benefits of ageing, the large majo-
rity of employers in all countries would point out
an increase in know-how and experience, con-
sidering other benefits less relevant. Among the
costs of work force ageing, labour costs are 
without a doubt the most prominent – although
the UK is an exception to the rule, with only 42
per cent of employers expecting an increase in 
labour costs. Dutch employers are most adamant
in expressing an expectation that labour costs
will increase: 77 per cent believe this will be the
case in the near future. An important conclusion
Photo: Stock Xchng/Pixelbase
Table 1.  Expected consequencesa of an ageing personnel structure for own organisation, 2005 
(Hungary: 2008) (per centages)
Costs
Increased labour costs 62 60 77  52  42
Greater resistance to change 56 36 56  55  45
Increased absenteeism/sick leave 69 31 53  54  40
Less enthusiasm for new technology 59 31 44  46  39
Deterioration of the organisation’s image 37 8 16  22  13
Benefits
Increased know-how and experience 68 69 61  67  78
Fewer conflicts within the organisation 34 40 13  37  24
Increased  productivity 33 46 7 37 25
Broader employability of the staff 29 37 29 30 35
More staff mobility 12 33 17 13 28
N = 354 451 597 332 572
(a) Based on the question “If the average age of the employees in your organisation increases, how likely or unlikely is it that the following out-
comes will occur in your organisation?”
Source: Employer Survey NIDI-UU (2005-2008).
Table 2.  Employers’ opinions on the desirability of retirement policies within their own organisation
1. Older employees  Desirable 29 29 42 44 60
working beyond age 60 Indifferent 27 29 39 27 32
Undesirable 44 42 19 29 8
2. Older employees  Desirable 10 12 9 24 30
working after age 65 Indifferent 22 33 34 27 43 
Undesirable 68 67 57 49 27
Source: Employer Survey NIDI-UU (2005-2008).
Greece
Greece
Hungary
Hungary
Netherlands
Netherlands
Spain
Spain
UK
UK
Consequences
316828_Demos_Special Issue_aug_def_2010  24-08-2010  16:05  Pagina 2VOLUME 26, SPECIAL ISSUE 3
to be derived from Table 2 is that in each country
the percentage of employers expecting an 
increase in labour costs is by far larger than that
of employers expecting an increase in produc-
tivity. In short, work force ageing is generally
perceived by employers as a burden and not as a
boom.
Employer support for retirement policies 
Later retirement
Research on older workers’ decisions to retire
has shown that employees are more inclined to
extend their working life if they are encouraged
and supported by their employer to delay retire-
ment. To gain insight into employers’ views with
respect to the postponement of retirement, we
asked them about the desirability of (a) older
workers being employed beyond the age of 60;
and (b) older workers continuing to work after
the age of 65. Employers could state whether
employment in each case was desirable or 
undesirable, or could also express their indiffe-
rence. The results are shown in Table 2. 
British employers hold the most positive 
opinions on older workers continuing to work
beyond the age of 60 or even 65. The UK is the
only country in the set of five in which the share
of employers in favour of workers staying on 
after age 65 outnumbers the share of those op-
posed. Hungary and Greece show a completely
opposite picture. A large majority opposes wor-
kers being employed beyond age 60 (and
especially 65). Not even one-third of employers
considered working after age 60 desirable. This
share falls to around 10 per cent for working 
after the age of 65. With respect to Hungary, one
should keep in mind that the official retirement
age is lower than in most other European coun-
tries (62 years for men and 60 for women). In
Spain and the Netherlands there is a clear diffe-
rence between employers’ opinions concerning
working beyond age 60 and working beyond age
65. Working beyond age 60 is supported fairly by
over 40 per cent, while working over 65 is sup-
ported by only a quarter of employers in Spain
and no more than 9 per cent in the Netherlands.
The share of employers sharing the opinion that
it is undesirable for workers to continue working
after age 65 is twice as high as in the UK. These
outcomes suggest that the official retirement age
in most countries may also serve as an age norm
within organisations.
The option of bridge employment
Bridge employment is often cited as a potential
policy measure to make gradual retirement pos-
sible. By bridging a full-time career and full-time
retirement, part-time work can contribute to the
transfer of knowledge and experience to youn-
ger employees, and at the same time help deal
with older worker’s desire to lessen work stress
or the demand for more leisure time. It has been
argued by some that partial transitions can 
sometimes be considered preferable to complete
transitions. A partial transition may even help
postpone the complete transition for some time.
From that specific perspective partial retirement
can be considered a potential instrument to 
extend the working life. Even though employees
may decrease their working hours at some age,
‘keeping connected’ may help them stay in the
labour force for a longer period. As a result, the
total number of hours supplied over the life
course may benefit from partial retirement. The
net effect of part-time retirement is still largely
unknown though. Experiences in various coun-
tries suggest that part-time retirement schemes
trigger a reduction in working time only for 
those workers who intended to keep on working,
but does not affect the intentions of workers 
who wanted to retire fully from the labour force.
On aggregate, part-time retirement schemes 
have trimmed the number of full-time workers
instead of full-time pensioners. 
To shed some light on the issue of part-time 
retirement we first asked employers about facili-
ties for part-time retirement. The results from
Do organisations have part-time retirement facilities? Selected EU countries
Source: Employer Survey NIDI-UU (2005-2008).
Photo: Stock Xchng/Siulesoj
100
90
80
70
60
50
40
30
20
10
0
%
Spain Greece Hungary UK Netherlands
Yes To be considered No
316828_Demos_Special Issue_aug_def_2010  24-08-2010  16:05  Pagina 3weak, the only exception to this rule being the
UK. Part-time retirement, which is often pro-
posed as a suitable compromise, is embraced by
those employers who are already familiar with
the coordination and management problems
tied to the realities of an ageing labour force. 
Notably a large majority of Dutch and British
employers do not see major obstacles in em-
ploying part-time workers, whereas Greek and
Hungarian employers are not very much in 
favour of it – Greece and Hungary being coun-
tries that have some of the lowest shares of
part-time employment in the European Union.
Although the data cover a limited number of 
European countries, the impressions about em-
ployers’ attitudes towards later retirement are
revealing. This study shows that there still is a
discrepancy between the aims formulated at the
level of the European Union and Member States
with respect to stimulating the labour force 
participation of older workers and the attitudes
of individual employers.
REFERENCES
• van Dalen, H.P., K. Henkens, and J.J. Schippers (2009),
Dealing with an aging labor force: What do European
employers expect and do?, Journal of European Social
Policy, Vol. 19, pp. 47-60. 
• van Dalen, H.P., K. Henkens, W. Hendrikse, and J.
Schippers (2010), Do European employers support
later retirement?, International Journal of Manpower,
Vol. 31, pp. 360-373.
Prof. dr. H.P . van Dalen and prof. dr. C.J.I.M.
Henkens, NIDI. E-mail: dalen@nidi.nl
VOLUME 26, SPECIAL ISSUE 4
the figure show major differences among our 
five countries. In the Netherlands almost half of
employers offer some kind of arrangement for
part-time retirement. The United Kingdom is in
second place, with about one-third of organisa-
tions offering some kind of arrangement. This is
totally different from the situation in Hungary,
where about 20 per cent of firms have an 
arrangement for part-time retirement but only a
limited group of employers considers intro-
ducing such an arrangement. In this respect,
Greece and Spain are still far behind when it 
comes to offering employees the opportunity for
a partial transition into retirement. 
To ‘test’ the odds for part-time retirement we
also asked employers to share their views on
part-time employment in a more general way by
responding to the statement, ‘It is difficult to fit
in part-timers in this organisation’. The results in
Table 3 show a picture that is more or less com-
parable to the figure: Dutch and British
employers generally have no problems or objec-
tions to employing part-time workers, while
Hungarian employers massively oppose wor-
king with part-timers. 
Conclusions
The overarching impression with respect to the
role of employers in the retirement process is
that in most countries support for later retire-
ment (certainly working beyond age 65) is still
NETHERLANDS INTERDISCIPLINARY DEMOGRAPHIC
INSTITUTE
NIDI is the national demographic institute of the 
Netherlands. Founded in 1970, NIDI became affiliated to
the Royal Netherlands Academy of Arts and Sciences
(KNAW) in 2003 and is the only social science institute
of the Academy. Firmly rooted in science and society
NIDI draws inspiration from the interplay of
demographic and social issues and strives for scientific
excellence.
Photo: Stock Xchng/Cieleke Photo: Stock Xchng/Lhumble
Statement: It is difficult to fit in part-timers in this organisation
Disagree Neutral Agree Total
Table 3.  Employers’ attitudes towards part-time work (per centages)
Greece 25 27 48 100
Hungary 7 22 71 100
The Netherlands 62 17 21 100
Spain 42 24 34 100
United Kingdom  66 19 15 100
Source: Employer Survey NIDI-UU (2005-2008).
316828_Demos_Special Issue_aug_def_2010  24-08-2010  16:05  Pagina 4

Do employers support later retirement? A view from European employers.

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