Understanding the impact of public policies and programs on the labour market decisions of older workers
On this page
- Participating governments
- Acknowledgements
- Executive summary
- 1. Introduction
- 2. Impact of Identified public policies and programs
- 3. Considerations for future policy and program development
- Appendix A: Detailed evaluation findings
- Bibliography
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Participating governments
- Government of Ontario
- Government of Québec*
- Government of Nova Scotia
- Government of New Brunswick
- Government of Manitoba
- Government of British Columbia
- Government of Prince Edward Island
- Government of Saskatchewan
- Government of Alberta
- Government of Newfoundland and Labrador
- Government of Northwest Territories
- Government of Yukon
- Government of Nunavut
- Government of Canada
* Québec contributes to the Federal/Provincial/Territorial Seniors Forum by sharing expertise, information and best practices. However, it does not subscribe to, or take part in, integrated federal, provincial, and territorial approaches to seniors. The Government of Québec intends to fully assume its responsibilities for seniors in Québec.
The views expressed in this report may not reflect the official position of a particular jurisdiction.
Acknowledgements
Prepared by Nichols Applied Management Inc. for the Federal, Provincial and Territorial (FPT) Forum of Ministers Responsible for Seniors. The views expressed in this report may not reflect the official position of a particular jurisdiction.
Executive summary
Background
Like most industrialized countries, Canada’s population and labour force are aging. These trends have implications for Canada’s future social and economic well-being and require considered policy responses.
In the fall of 2018, the Forum of Federal, Provincial and Territorial (FPT) Ministers Responsible for SeniorsFootnote 1 commissioned a domestic and international environmental scan regarding the influence of public policies and programs on the choices of older workers to remain active in, retire from, or re-enter the labour market. This research builds upon the 2018 FPT Seniors Forum report on Promoting the Labour Force Participation of Older Canadians – Promising Initiatives and will help inform public policy discussions, decisions, and targeted program development in areas related to the labour force participation of older workers.
Evaluation findings
In carrying out the environmental scan, it became quickly apparent that there is a lack of rigorous evaluation findings regarding the effect of public policies and programs on the labour market choices of older workers. This limits the ability to draw firm conclusions from the available evaluation research.
Reasons for the shortage of solid evidence on the effect of public policies and programs in this area include:
- evaluations of current or previous policy or program initiatives may not have been done
- a policy or program may be relatively new, and it is too early to determine longer-term outcomes
- variations in the design of programs across jurisdictions and differences in jurisdictional, social and economic circumstances make meta-analysis of findings across studies challenging or impossible
- evaluation methodologies may not support identifying what would be expected to occur in the absence of an initiative, and
- other influences can make it difficult to attribute observed changes in labour market behaviour to a specific policy or program
The findings on the effectiveness of public policies and programs on the labour force decisions of older workers are presented in Section 2 of this report. Additional detail on specific initiatives can be found in Appendix A.
Identified below are key findings on public policy and program influences on the labour market decisions of older workers.
- Decisions of older workers about participation in the labour market are influenced by many factors, but financial considerations are usually central. Financial readiness was identified as the single most important reason for retirement in a 2008 Survey of Older Workers in Canada
- Evidence on the effectiveness of wage subsidies for employers to encourage hiring unemployed older workers is mixed. This is due to variations in: program design; regional labour market conditions; and, the rigour of evaluation approaches. Evaluations of the Labour Market Development Agreements in Canada have found that older workers who are active and former Employment Insurance (EI) claimants who participate in Targeted Wage Subsidies have a higher incidence of employment and increased employment earnings compared to members of a comparison group. However, some evaluations in other jurisdictions have questioned the positive impacts of wage subsidies on encouraging employers to hire older unemployed workers
- Financial incentives directed at older workers can have positive impacts on labour market participation, depending on the design of the incentive. A key consideration is how to reduce the potential for individuals to receive an incentive when they would likely continue to work or return to work without it
- There appear to be few targeted public sector workplace health and safety policies and programs for older workers, and there is little evidence on the efficacy of those which do exist. Although broadly-targeted workplace health and safety programs are shown to have a positive impact on labour force participation across all age groups, it is often only a supposition that these initiatives may be particularly beneficial in supporting older workers to remain in the labour force
- There is evidence that participation in training can help older jobseekers obtain employment, especially if training is a component of a more comprehensive program that may also include work activity, employment assistance services, and post-program follow-up and mentoring
- The evidence on the impact of older worker participation in training is limited and tends to be focused on unemployed older workers, not the entire older worker population. Positive employment outcomes have been found for some training programs, although the quality and sustainability of the jobs obtained after training have not been evaluated
- There are also some promising evaluation findings that comprehensive employment programs and services that include age-specific measures addressing health constraints, care obligations and other obstacles for placement are effective in assisting unemployed older workers find employment
- There are relatively more robust evaluation findings related to employment programs and services than for many other types of policies and programs aimed at increasing the labour market participation of older persons. This may be because many of these programs and services are targeted at unemployed persons, making it relatively easier to identify control groups (in other words, non-participants) for the purposes of evaluating results
- Counselling and job search training / supports can assist unemployed older workers in obtaining employment, although there might be a time lag between the service offering and the employment impact. These services are more likely to be successful if they are short-term, intense in nature, and personalized to the older worker
- Although flexible work arrangements can extend the working lives of many workers, initiatives incenting reduced working hours can have the unintended consequence of reducing overall participation of older workers in the labour market
Considerations for future policy and program development
Drawing broadly on the learnings gained from this environmental scan, the following are considerations for future public policy and program development aimed at encouraging labour force participation of older workers in Canada.
Additional Evaluation Research is Needed. This environmental scan found much supposition about the influence of various public policies and programs on the choices of older workers to remain active in, retire from, or re-enter the labour market, with sometimes limited or no rigorous evaluation research to back these suppositions up. Additional evaluation work could be done, with findings integrated into public policy and program development. It would be beneficial for this evaluation work to look beyond aggregate results and identify variations in outcomes among different groups of older workers.
Labour Market Decisions of Older Workers Are Influenced by a Diverse Range of Factors. Decisions about the extent and nature of involvement in work as one gets older are influenced by a broad range of factors, only some of which governments can influence. The diversity of the older population, including diverse interests, financial circumstances, and care obligations, is a consideration when developing policies and programs intended to extend the working lives of older workers.
A Strategic and Coordinated Approach to Policy and Program Development. Policy and program development to encourage and support labour market participation of older Canadians could benefit from a more strategic and coordinated approach. Considerations include: the multiplicity of factors that can influence older workers’ decisions; the inter-relationships and potential for coordination with other policies and programs; the role of initiatives to support younger workers to be able to remain productive in the labour market as they age; the labour force participation for all age groups and under represented groups; and understanding the perspectives and intentions of workers throughout their careers about preparing for and transitioning into retirement.
Retaining Older Workers and Preventing Unemployment. Older workers who become unemployed can face challenges finding stable and good paying employment (ESDC 2016). Initiatives that focus on supporting older workers to remain employed will be important components of broader strategies to support older worker labour market participation.
Incentives May Differ Between Low and High-Income Earners. Policy and program development aimed at influencing the labour market decisions of older workers is complicated by the diversity of the older worker population and the relative importance of - and interplay among - factors that individuals may weigh in their decision making. Differences in financial circumstances may be particularly relevant and call for consideration of different policy levers for low, average and high-income earners.
Public Policies and Programs Could Model and Support Leading Practices. Governments are large and influential employers and can model policies, programs and practices that evidence suggests support older workers continue to be productively engaged in work as they choose. Further, governments can support other employers that could also benefit from the contributions of older workers by helping to identify and share information about successful initiatives and practices.
Acceptability of Policy Alternatives by the Canadian Public. In addition to understanding the potential efficacy of policy alternatives to encourage greater labour market participation of older workers, a better understanding of the acceptability of alternatives by the Canadian public would be useful.
Impact of leaves on the labour market participation of older workers. Job-protected leaves could be useful to older workers when they are facing caregiver responsibilities, personal illness, and the death of a family member. Legislated job-protected leaves, and employer-provided leaves, may help older workers stay in the workforce while they manage caregiving responsibilities and health issues. This would be a Provincial/Territorial responsibility except for a small segment of the labour force.
1. Introduction
1.1 Background
Like most industrialized countries, Canada’s population is aging due to lower fertility rates and longer life expectancy. The rate of population aging is not consistent across Canada; it is more rapid in Eastern Canada and slower in the Prairie provinces and territories (ESDC 2018b).
As Canada’s population ages, so does its labour force. This aging of the labour force is happening at the same time as a host of other shifts are affecting Canada’s labour market, including:
- economic globalization and growing demands for productivity improvements
- technological changes that affect how and where work is done, and
- growth in knowledge-based work and increasing education and skill requirements for many jobs
Although widespread labour shortages are not expected over the next five to ten years, skill shortages are expected to increase in certain occupations, sectors and regions of Canada. Without an offsetting increase in productivity, future potential labour shortages and more immediate skill shortages, along with Canada’s increasing life expectancy, have significant implications for Canada’s future social and economic well-being. Not only will Canada be challenged in growing its economy, it will also be faced with potential increasing health and social costs associated with an older population. Considered policy responses are needed.
1.2 Purpose and scope
The purpose of this environmental scan is to increase understanding of the impact of domestic and international public policies and programs on the choices of older workers (aged 55 and older) to remain in, retire from, or re-enter the labour force to inform public policy discussions, decisions and targeted program development in Canada.Footnote 2
The environmental scan is specifically focused on public policies and programs:
- directly related to a worker’s labour market engagement (for example, retirement income systems, flexible workplace arrangements, needed competencies to work and look for work, etc.). Although broader health, education, and social policies and programs also influence the decisions of older workers to participate in the labour market, they are beyond the scope of this study
- specifically targeted at older workers. Policies and programs intended for workers of all ages are only included if evaluation findings related to the impact on older workers could be identified. No attempt is made to ‘extrapolate’ from aggregate evaluation findings to estimate the impacts of these broader public policies and programs on older workers
- for which evaluation findings were available. Although there are a number of policies and programs for which a supposition could be made about the expected influence on the labour market engagement of older workers, care is taken not to speak outside the boundaries of findings from research studies. Similar to the FPT Seniors Forum’s earlier report, Promoting the Labour Force Participation of Older Canadians – Promising Initiatives (2018), policies and programs presented in Section 2 of this report are grouped into the following categoriesFootnote 3
- financial incentives
- workplace health and safety
- the retirement income system
- skills development
- employment legislation
- employment programs and services, and
- workplace accommodations
1.3 Approach
In the fall of 2018, researchers carried out an internet-based environmental scan to identify relevant publications based on the scope noted above. Along with searching pertinent websites and databases with relevant search terms (for example, ‘older workers’, ‘attraction’, ‘retention’, ‘labour market participation’, ‘policies’, ‘programs’, ‘evaluation’, ‘outcomes’), the reference lists of reviewed documents were also examined to check for further studies. Priority was placed on studies published in peer-reviewed journals, by well-known organizations (for example, OECD, European Union agencies) and research agencies, as well as on official government documents. Priority was also placed on more recent studies (in other words, in the past five to ten years); however, if earlier research of particular relevance was found, it was included in the review. In total, the environmental scan led to the identification and review of over 65 documents that are identified in Appendix A.
To ensure the environmental scan was focused and conducted as efficiently as possible, the following initial questions guided the research activities:
- is there evidence that a particular policy or program influences the decisions of older workers to retire from, remain active in, or to re-enter the labour force
- do particular policies or programs have differential impacts on different segments of the older worker population
- what are the costs of particular policies or programs? What is known about the cost-effectiveness of different programs (in other words, costs relative to achieved outcomes)
- how do other factors or trends support or constrain the effect of public policies and programs on the labour market decisions of older workers
- what is the potential relevance/applicability of policies/programs to the broader Canadian context
Within the literature, there is considerable supposition about what constitutes an effective policy or program for influencing the labour market decisions of older workers but limited definitive evaluation evidence to support these suppositions. Reasons for the shortage of robust evaluation evidence include:
- evaluations may simply not have been conducted
- initiatives may be relatively new and it is too early to assess long-term outcomes
- evaluation research methodologies may not support firm conclusions on impacts (for example, identify what the likely outcomes would have been in the absence of a policy or program); and
- confounding and often complex variables make it difficult to attribute observed changes in labour market behaviour to a specific policy or program (for example, broader social or economic trends)
1.4 Report organization
The remaining sections of this report are as follows:
- section 2 provides a summary of evaluation findings identified through the environmental scan. The summary is divided into the public policy and program categories noted in Section 1.2 above
- section 3 provides considerations for future policy and program development based on the environmental scan
- appendix A provides summary tables of evaluation findings for specific initiatives
2. Impact of identified public policies and programs
2.1 Financial incentives
The interest in encouraging the retention and re-entry of older workers into the labour market has led many countries in the western world, including Canada, the United States, Australia and member states of the European Union (EU), to offer various financial incentives. These cover a broad range of policies and programs intended to encourage older workers to remain active in the labour market (in other words, increase the supply of older workers) and encourage employers to hire and retain older workers (in other words, increase the demand for older workers).
Financial incentives can take different forms, including:
- financial incentives for employers (for example, wage subsidies)
- financial incentives for older workers (for example, earnings supplements and tax credits), and
- financial incentives through broader tax policy that can influence the motivation of and need for individuals to extend their working lives and decisions of employers
Designing effective financial incentive programs to encourage older worker participation in the labour market is highly challenging. Incentives must be large enough to induce a change in behaviour of employers and/or older workers. Wage subsidy programs can be particularly challenging to design to reduce the potential for subsidies being paid for employment that would happen anyway, and avoid unintended behaviours, such as employers terminating an unsubsidized employee to hire an individual eligible for a subsidy.
The effectiveness of financial incentives on older worker labour market participation can be affected by a host of other factors, such as:
- whether participation in a program is voluntary
- the length of time an older worker may have been unemployed or out of the labour force
- individuals’ previous earnings levels
- individuals’ financial and personal circumstances (housing income and wealth, health, marital status, partners’ retirement status)
- labour market conditions (incentives can be expected to be less effective when there is strong labour market demand), and
- corporate and personal tax policy, which can affect the net financial benefits of incentives to employers and workers
There are large gaps in the understanding of the effects of various financial incentives on the labour market participation of older workers. These include:
- the effects of wage subsidies paid to employers and employees across older worker population subgroups (for example, low-wage and high-wage workers; long-term and short-term unemployed; men and women)
- the effectiveness of different program designs (for example, eligibility criteria; subsidy levels and durations) for different sub-populations and under different macroeconomic circumstances, and
- the interaction between financial incentives and other policies and programs that may influence the labour market decisions of older workers (for example, retirement income programs and tax policies)
Financial incentives for employers
Employers may be less likely to recruit older individuals because of perceptions about lower worker productivity and potential for returns on hiring, onboarding (in other words, helping new hires understand and adjust to the social and performance aspects of their new jobs), and training costs.
The most common type of employer financial incentive is wage subsidies. These are intended to compensate employers for hiring older workers they would otherwise be hesitant to hire. Wage subsidies are typically temporary measures ranging from six to 12 months.
Evidence on the effectiveness of wage subsidies for employers to encourage hiring unemployed older workers is mixed. This is due to variations in: program design (for example, amount of subsidy, duration of subsidy, eligibility for the subsidy); regional labour market conditions (for example, unemployment levels and skills shortages or surpluses); and, the rigour of evaluation approaches.
Evaluation results for specific public policies and programs include the following:
- Targeted Wage Subsidies under Labour Market Development Agreements in Canada. Evaluations of the Labour Market Development Agreements in Canada have found that older workers who are active and former Employment Insurance (EI) claimants who participate in Targeted Wage Subsidies have a higher incidence of employment and increased employment earnings compared to members of a comparison group
- Austria’s Come Back program. Under this program, unemployment insurance funds are used to provide employers with hiring subsidies for workers aged 45 and over. Positive effects have been found for the long-term unemployed. One study found 65% of workers, regardless of age, were retained after their subsidies ended (European Commission 2012)
- Belgium wage subsidy program for workers aged 58 or older. Under this program, private sector employers’ social security contributions were reduced for workers aged 58 or older. This program was found to be ineffective in preventing early retirement except for specific subsets of workers (for example, male workers in the manufacturing sector) (Boockmann 2015)
Financial incentives for older workers
Research has found that older workers, as compared to younger workers, often require higher levels of compensation to induce their participation in the labour market (OECD 2005, Eurofound 2013). Financial incentives to encourage older workers to delay retirement, phase into retirement, or re-enter the labour market after a period of retirement include earnings supplements and tax credits.
Earnings supplements
Some countries have introduced forms of earnings supplements for unemployed older workers, recognizing that older workers’ employment prospects can diminish if they experience long periods of unemployment and their expectations for earnings at previous levels can make them reluctant to accept jobs with lower pay.
Switzerland, Germany and the UK have introduced types of earnings supplements as incentives to encourage labour market re-entry of older workers after a period of unemployment.
Evaluation findings include:
- the Swiss Zwishchenverdienst program. This program has been found to be both widely used and effective, especially for long-term unemployed with lower qualifications and prospects for re-employment. The program covers 70% to 80% of the difference between the wage an individual received in their last job and their new job for up to 12 months (Gerfin/Lechner 2005 cited in Konle-Seidl 2017)
- the New Deal 50 Plus Employment Credit in the UK. This credit was directed towards people aged 50 and over who had been out of work and receiving certain income support benefits for six months or more. A tax-free wage top-up referred to as an employment credit) was offered for up to one year as part of a broader program that also included job search support and a training grant. An evaluation found a high level of job retention after the employment credit ended (DWP 2010).Footnote 4 The employment credit was found to be less effective for: males; individuals with disabilities or who had previously received disability benefits or income support; individuals between ages 65 and 69; and individuals who were single, divorced or cohabiting
Tax credits
Tax credits or offsets can reduce the amount of income tax an individual is required to pay.
An evaluation of Australia’s former Mature Age Worker Tax Offset found that it had a small positive effect on labour supply, increasing labour market participation by around 0.5% (Breunig and Carter 2018). It was concluded that the modest amount of the tax offset ($500) led to modest behavioural change (Breunig and Carter 2018).
Financial incentives through broader tax policy
Decisions about the timing and form (in other words, the balance between work and leisure activities) of retirement is influenced significantly by an individual’s financial circumstances. Broader tax policies, such as retirement savings deductions limits, can influence the motivation and ability of workers to save for retirement. Older individuals with lower retirement savings can be expected to be more likely to participate in the labour market.
The amount of income tax an individual is required to pay for each additional dollar of income, in Canada, the Old Age Security pension is available at age 65 and is recovered at a rate 15% for those with higher incomesFootnote 5 (in other words, the Marginal Effective Tax Rate)Footnote 6 can factor into the employment decisions of older workers. As an example, individuals whose income is taxed at a higher rate and whose earnings approach or exceed the threshold for the OAS Pension Recovery Tax ($77,580 in 2019) can be expected to weigh the financial benefits and costs of additional earnings into their labour force participation decisions.
The need for research on the impact of various aspects of broader tax policy on the labour market decisions of older workers in Canada and elsewhere became apparent through this research.
2.2 Workplace health and safety
There is growing awareness that workplace health and safety initiatives are needed to prevent workplace-related diseases and injuries, as well as to promote overall well-being (McDermott 2010). Although these initiatives are important for workers of all ages, they are especially important for older workers who are more likely to experience decreased physical capacity. For many older workers, the decision to seek early or full retirement as soon as possible is often associated with work-related stress and health problems (Kullmann and Rocca, 2016). Good health increases the likelihood of later retirement.
It is an employer’s responsibility to provide a safe and healthy work environment. The primary role of government in this area is to set and enforce the legislative requirements for workplace health and safety. Additionally, governments typically develop information resources, education materials, and training programs that cover a range of workplace health and safety-related issues.
Although there is general understanding that workplace health and safety has an important role to play in supporting the ongoing labour market engagement of older workers, there are few public policies and programs targeted specifically at older workers and even fewer still with robust evaluation findings. Most government policy and programs related to workplace health and safety apply to all workers despite the likely importance of these measures to extending the working lives of older workers (for example, Austria’s Fit2Work, Denmark’s training program for health and safety promotion).
Within a number of Member States of the European Union, the need to promote good physical and mental health among older workers is encompassed within broader active aging policies and programs that make use of a number of strategies including financial incentives, training programs, and workplace accommodation arrangements. This makes it difficult to draw causal links between specific actions to improve workplace health and safety and increased labour market engagement of older workers.
No differential impacts of public policies or programs with a workplace health and safety focus were identified through this research. However, it can be expected that workplace health and safety initiatives targeted at older workers will have the greatest influence on older workers facing work-related stress and health problems, whether physical or mental. In addition, public policies and programs that are preventative in nature (for example, supporting companies with intervention and assessment supports) may have a greater influence on the choices of older workers at higher risk of experiencing health issues.
There are considerable information gaps regarding the difference that public policies and programs might have on the labour market decisions of older workers. Information gaps that future research could seek to address are:
- assessing the differential impacts of broad workplace health and safety policies and programs. While broadly-based policies and programs that support workers throughout their working lives can be expected to be advantageous to older workers, it would be beneficial to future policy and program development to have a better understanding of the differential impacts of policies and programs on older workers as compared to younger workers
- disentangling the impacts of workplace health and safety initiatives from broader active aging policies and programs. Active aging policies and programs often cross various domains (for example, health promotion, active living, livelong learning, etc.). Building understanding of the effect of public workplace health and safety policies and programs on the labour market participation of older workers requires research that will help identify the relative contribution of these initiatives to the labour market decisions of older workers
2.3 Retirement income system
Financial considerations are usually central to the labour force participation decisions of older workers. Financial readiness was identified as the single most important reason for retirement in a 2008 Survey of Older Workers in Canada (Pignal et al. 2010).
A jurisdiction’s retirement income system is therefore an important area of focus when looking at potential policy adjustments intended to support increased labour force participation of older workers. Adjustments in this policy realm can be particularly relevant to the decisions of older workers in lower income situations.
Governments in most western countries have made changes to retirement income systems to both ensure the ongoing financial viability of their pension systems and increase the labour market participation of older workers. Steps taken to encourage older worker participation via pension and tax measures can be categorized as follows (European Commission 2012, Eurofound 2013):
- increasing the age at which workers can retire and begin drawing their public pension. In many instances, this policy is being driven by concerns about the financial sustainability of social security programs. Some countries, such as Finland, Italy, and Norway, are also attempting to link pension contributions and payments to life expectancy
- increasing pension benefits based on additional years worked up to and beyond the statutory pension age. These benefits can be offered as lump sum payments or as a percentage increase in the pension. The timeframe over which these benefits are accrued varies (for example, monthly, quarterly or annually)
- adapting pension and taxation systems to facilitate continued work after retirement (for example, allowing pensioners to receive income from pensions and employment simultaneously)
- combining the above measures to make early retirement less financially attractive by either increasing the minimum age at which workers can access pension benefits, increasing the costs of taking early retirement (for example, decreasing the value of the pension), or eliminating early retirement benefits altogether
Adjustments to any components of a jurisdiction’s retirement income system need to consider the potential interplay among retirement income policies, broader benefit and social support policies, and tax policies. An example of the potential interplay between retirement income system policy and tax policy in Canada is the Old Age Security (OAS) Pension Recovery Tax.
Canada’s retirement income system
Canada’s retirement income system is based on three pillars:
- Old Age Security (OAS) / Guaranteed Income Supplement (GIS). The objective of the first pillar is to ensure a minimum income for seniors and mitigate income disruptions in retirement (ESDC 2018)
- Canada Pension Plan (CPP) / Quebec Pension Plan (QPP). The second pillar of Canada’s retirement system is CPP/QPP. CPP/QPP work in tandem to provide a measure of protection for a contributor and his or her family against the loss of income due to retirement, disability or death
- employer and Union-Sponsored Pension and Retirement Plans and Voluntary Personal Savings.Footnote 7 These provide Canadians with income in their retirement beyond the base provided by the first two pillars
Like many other countries, Canada’s retirement income system has undergone change over the past decade to accommodate longer working lives and gradual transitions from employment to retirement (ESDC 2018). Key changes include:
- elimination of the CPP work cessation testFootnote 8
- introduction of the CPP Post-Retirement Benefit (PRB)Footnote 9, and
- introduction of OAS and CPP deferral. Individuals can now choose to delay receiving OAS and/or CPP up to age 70 in exchange for higher monthly amountsFootnote 10
Changes have also been made in Canada’s income tax system and human rights legislation to support the changes in the retirement income system:
- the Income Tax Act was amended to allow individuals to continue to accrue pension benefits while receiving partial pension benefits under defined benefit employer pension plans (supporting phased retirement)
- mandatory retirement was officially eliminated across Canada in 2012 (allowing workers to continue to work past a certain age, if they so choose)
- the RRSP withdrawal age was increased to 71 as a way to recognize and provide further tax assistance to those working past 65
Evaluation of changes in retirement income systems
As retirement income systems are part of complex systems of inter-connected benefits and social supports (for example, unemployment benefits, disability benefits) and tax policies, evaluating policy changes can be highly complex.
There is some evaluation work being done in Canada in this area, including:
- an evaluation of the OAS pension. The initial phase of this evaluation was completed in 2018. Phase 2 of the evaluation is focussing on the allowances and the voluntary deferral of the OAS (in other words, being able to defer receipt to age 70), including the possible influence on labour market participation of OAS pensioners. (ESDC, Evaluation of the Old Age Security Program: Phase 1, 2018)
- the impact of changes introduced in 2008 to the earnings exemption policy for the GIS (the exemption was increased from $500 to $3,500) have been evaluated. It was found that earnings increased by 14%t among GIS recipients who were working for an employer; however, no conclusive evidence was found on the impact of the policy change on employment rates of GIS recipients. Care must be taken in extrapolating the findings from this research because of the relatively small proportion of GIS recipients who work for an employer (4% in 2014) and who work enough to take full advantage of the $3,500 exemption (2% in 2014) (ESDC, Evaluation of the Old Age Security Program: Phase 1, 2018)
Opportunities to build understanding of the influence of Canada’s retirement income system on the labour force participation decisions of older workers include evaluation of:
- the influence of the changes to the CPP program implemented between 2011 and 2016 on the labour force decisions of older workers, in aggregate and on specific groups of older workers (for example, workers in low vs. higher-paying jobs). Evaluating the impacts of eliminating the CPP work cessation test and introducing the CPP Post-Retirement Benefit (PRB) may not be possible until more longitudinal data is available
- the awareness of GIS recipients of earnings exemption provisions. The low take-up by GIS recipients, and accordingly the potential for exemptions to influence the participation of GIS recipients in the labour force, may be due to low levels of awareness. Awareness of the exemption could be an area for further research (ESDC 2018).
- the interaction between OAS and CPP program design and tax policy (for example, the impact of the OAS Pension Recovery Tax on the labour market decisions of older workers)
- in 1987, the CPP was reformed to allow for flexible retirement. Since then, individuals can opt to receive a full CPP retirement pension at age 65, a reduced pension as early as age 60, or an increased pension as late as age 70. In spite of this flexibility, few Canadians choose to defer the OAS pension or the CPP retirement pension beyond age 65
Key findings and conclusions from evaluations of retirement income systems in other jurisdictions include:
- Partial retirement schemes. Many EU Member States and Norway have national or sector-level partial retirement schemes. None of these schemes has been found to extend working lives on an aggregate level (Eurofound 2016). Under a part-time pension scheme in Finland, workers aged 61 or over may reduce their working hours and salary and be compensated for half the loss in their salary. Research findings show no clearly positive impact on the length of working lives and hours contributed to the economy (Eurofound 2016). One study found that almost one-half of partial retirees would have continued working full time without the scheme (Takala and Vaananen 2016).
Workers in lower-paying jobs are often unable to afford to participate in partial retirement schemes even if their wage loss is partly compensated (Eurofound 2016).
However, partial retirement schemes have been shown to extend the working lives of individuals for whom full-time work has become too demanding for health reasons, and for those with disabilities, in physically or mentally demanding jobs, and with care responsibilities (Eurofound 2013). - Eliminating early retirement options. An evaluation of the elimination of an early retirement option Vervroedge Uittreding (the VUT) in the Netherlands in 2006 found no apparent influence on workers’ expected retirement age. Further, it appears to have led to increased use of other benefit programs such as unemployment and disability, effectively muting the intended labour market outcome of increased labour market participation (Bauer 2013).
- Work continuation incentives. Provisions in pension systems that provide the possibility to increase pension benefits by working additional months/years have been found to have some potential to effectively raise retirement ages (Eurofound 2013). A bonus for individuals who continued working after the age of 62 was introduced in the Netherlands in 2009. An evaluation found the bonus led to an increase in the expected retirement age of older workers relative to younger workers (on average, a one year and seven-month difference) (Soca 2013).
- Changes in retirement income systems, generally. Changes in retirement income systems are likely to be more effective in influencing the retirement and employment decisions of older workers than changes in labour market policies, such as skills development or workplace accommodation (Gustman and Steinmeier 2005).
That said, financial incentives through the retirement income system may be less effective in extending working lives of those in better-paying jobs, where the motivation to stay in employment may be more closely linked to job satisfaction (Eurofound 2013).
Care must be taken to avoid unintended intergenerational impacts when considering pension reforms. As an example, if pensioners are permitted to continue working but employers do not have to make the same pension contributions for them as younger workers, this effectively makes older workers ‘cheaper’ to hire than younger workers, all else being equal.Footnote 11
2.4 Skills development
Ongoing engagement of older workers in the labour market requires them to possess the requisite qualifications and skills to remain productive (in other words, the concept of work-ability). As skills are built throughout one’s career, initiatives that support lifelong learning and skill development play an important role in workers remaining productive as they get older.
Despite the importance of knowledge and skill development for continued productivity in the labour force, the participation rate of older workers in education and training is persistently lower as compared to younger workers. This is attributable to several factors including:
- reluctance on the part of employers to invest in training for older workers, possibly due to a misconception that there isn’t sufficient return-on-investment to warrant training workers who might exit the labour force in the very near-term; and
- lack of interest in skills development on the part of older workers themselves, possibly because they consider themselves too old for training, have no personal interest in obtaining new skills, don’t plan to remain in the labour force long enough to warrant additional training, or do not find training approaches to be suitable for their learning needs
One of the most important factors influencing the success of initiatives aimed at improving the skill sets of older workers and jobseekers is how training is being delivered. It is best that training for older workers be tailored to their unique circumstances and learning styles. Learning is likely to be more effective if it is self-paced, job-related, and work-integrated (Picchio 2015).
There are a number of information gaps with respect to skills development initiatives for older persons where additional research would be helpful, including:
- the outcomes associated with different types of training for older workers and jobseekers
- the quality and sustainability of jobs obtained by older workers after having participated in training, and
- the cost effectiveness of skills development services
Given the concern with cream-skimming (in other words, selection bias), an important methodological consideration for any future research will be to try to identify what would have happened in the absence of a skills development initiative.
Government support for the training of older workers can take many forms, including publicly funded training; financial support for training (for example, job training grants); skills coaching; and working with education providers.
Publicly-funded training programs
Governments in various countries, including Canada, offer training for older workers and jobseekers. However, much of this is delivered in government programs focused on supporting unemployed workers in obtaining employment as opposed to training for currently employed workers. Only a limited number of countries offer publicly funded education and training programs specifically aimed at providing support for the updating of skills of employed older workers.
Although training can be an important tool for supporting workers in improving their productivity and employability, evidence of the outcomes (especially longer-term outcomes) is not always available.
Evaluations of the Labour Market Development Agreements in Canada have looked at impacts of older worker participation in Skills Development. Results demonstrate that participation in Skills Development by older workers who were active and former EI claimants increased the probability of employment and employment earnings compared to comparison group members. Among active claimants, older workers who participated in Skills Development had the largest cumulative gain in earnings.
Findings from other jurisdictions include:
- the European Foundation for the Improvement of Living and Working Conditions found that, where outcomes data was available, training programs targeted at unemployed people, of varying ages, led to a subsequent employment rate of 25 to 50% for those who underwent training. Given that older workers often represented 15 to 45% of total people trained, it is inferred that older workers also benefited, though the quality and sustainability of those jobs is not clear from the evaluation results
- evaluation results for the Work Based Learning for Adults (WBLA) in the United Kingdom, which is a voluntary training program that was designed primarily for those age 25 or over, who had been on Jobseekers Allowance (in other words, unemployment benefits) for more than six months, indicate that the WLBA increased the probability of work (any hours) by 17 to 18% among participants aged 50 and over
The available evaluation evidence suggests that participation in training can help older jobseekers obtain employment. However, an important consideration when assessing evaluation findings for voluntary training programs is the potential of ‘cream-skimming’, whereby employment gains associated with training are the result of selection bias on the part of those responsible for administering the program (in other words, those with the greatest chance of being employed are recommended for training as opposed to those with the greatest need for training).
Financial support for training
Governments might choose to financially support training for older workers and jobseekers through either a grant or a wage subsidy. Although there are a few examples of programs in which job training grants are paid to employers to support the retention of older workers, evaluation evidence is largely focused on grants or wage subsidies aimed at reintegrating older unemployed persons back into the labour force. Even so, the evaluation findings are limited. Specifically:
- in Latvia, a program for unemployed persons over the age of 50 was established whereby the government subsidized half of wages (up to the minimum monthly salary) for employers who hired them, so long as employers provided on-the-job training (in other words, coaching). It has been reported that 80% of participants who completed the program were able to find a permanent job
- one of the elements of Canada’s Vocational Rehabilitation Program for Canada Pension Plan Disability Benefit recipients is financial support for training. This program also includes employment counselling and job search support. Research using administrative data, a comparison group methodology, and sensitivity analysis found this program to have positive employment impacts
Based on the reviewed evaluation findings, it is difficult to make specific comments on the efficacy of providing financial support for the training of older workers and jobseekers. Although financial supports undoubtedly encourage increased training opportunities, it is often unknown whether these were cost effective or to what degree older persons would have found and/or maintained employment in the absence of financial support for training. One exception though is the Vocational Rehabilitation Program for Canada Pension Plan Disability Benefit recipients. According to research using a comparison group methodology, labour market outcomes for the program suggest a positive cost benefit result.
Skills coaching
A number of jurisdictions offer skills coaching or training advice to jobseekers, though these are typically not targeted at older persons. Even so, there is evaluation evidence for the Skills Coaching service in the United Kingdom indicating that individuals over the age of 50 were more likely to exit the program early and less likely to achieve a work-related outcome as compared to younger participants. Regarding employment outcomes, the prospect of full-time job entry decreased with age, although participants over the age of 50 were the most likely to start part-time work (DWP 2010).
Working with education providers
Governments might also choose to work with education providers to support training for older persons. Although there are some interesting initiatives – such as a training program in the Eastern United States to support older persons become home care workers – available program performance information tends to be focused on outputs and not outcomes. While these initiatives have helped to broaden training options for older persons, it is not clear what effect these have had on longer-term employment outcomes for older workers.
There is little mention of differential impacts in the studies that have been reviewed. Two notable exceptions are:
- the majority (75 to 80%) of participants in the United Kingdom’s Work Based Learning for Adults were male. However, the reason for this was not identified in the reviewed literature. It might be related to the type of occupational training being offered (for example, in occupations that tend to have higher proportions of male employees)
- the Canada Pension Plan Disability Benefit Vocational Rehabilitation Program found to have a larger, and in some cases statistically significant, impact for women (Campolieti et al. 2014)
2.5 Employment-related legislation
For the most part, employment legislation is a mechanism that facilitates the development and implementation of public policies and programs in the other categories of initiatives discussed in this section. For example, the retirement income system policies and programs discussed in Section 2.3 rely on enabling legislation.
That said, there are a few specific examples where legislation has been used to try to address labour market challenges faced by older workers. Specifically, legislation to (ESDC 2017a):
- eliminate mandatory retirement
- prohibit age discrimination
- protect older, as well as other workers, in case of layoff or leaves (including caregivers’ responsibilities)
- prioritize the hiring of older workers
- require that companies develop a plan of action for the employment of older workers, and
- require a minimum percentage of employees to be older workers
The elimination of mandatory retirement has been found to have a positive effect on the labour market engagement of older workers (DWP 2012). With respect to the other types of legislation noted above, no evaluation findings were identified on impacts on the behaviour of older workers. Nevertheless, legislation in these areas would be expected to influence employers’ actions and expand opportunities for older workers in the labour market.
2.6 Employment programs and services
Employment programs and services cover a broad range of supports including job search services, job matching tools and services, employability/self-marketing training, and counselling services. Many of these measures are focused on supporting older individuals find new employment after a period of unemployment, as opposed to retaining employment.
There are relatively more robust evaluation findings associated with employment programs and services than for many other types of policies and programs aimed at increasing the labour market engagement of older persons. That might be because many of these programs and services are targeted at unemployed persons, making it relatively easier to identify control or comparison groups (in other words, non-participants) for the purposes of evaluating results. Even so, there remain a number of information gaps. Specifically:
- policies and programs associated with job matching, recruitment services, referral services, and targeted support for older women and older persons seeking self-employment. Evaluation findings for these policies and programs were relatively sparse as compared to evaluation findings related to counselling and other job search training and supports
- the cost effectiveness of employment programs and services. While evaluations have been done on the effectiveness of these types of programs and services relative to employment outcomes, few specifically address cost effectiveness
- whether the identified effects are independent of other factors including labour market conditions
Important considerations in evaluating employment programs and services is whether participation is mandatory or voluntary and how participants are selected. The ability of older jobseekers to participate voluntarily, or for those delivering a program to ‘select’ participants, will influence how effectiveness is assessed.
Factors that may influence the success of these policies and programs include:
- perceptions that older jobseekers have of employment programs and services
- the willingness of employers to employ older workers
- the prevailing labour market conditions
- whether ongoing positive peer support is provided
- the care taken in identifying, screening and selecting participants
- whether complimentary measures that can help in addressing non-labour market issues (for example, health problems, care obligations) are also provided, and
- the extent to which services are personalized and tailored to individual client needs
Multipronged service offerings
Employment programs and services are sometimes combined with other employment-related tools and resources, such as skills development and financial incentives for employers or workers. The comprehensive nature of these services can be considered a strength, given that older workers often face multiple barriers to labour market participation. However, the multipronged approach can make it more challenging to assess the contribution of individual program components to observed outcomes.
One of the most prominent international examples of a multipronged program is Germany’s Perspektive 50 Plus, a program targeted at unemployed income support recipients aged 50 and older. Counselling, short-term training, and advice on other matters (for example, debt reduction, health-related matters) are provided as needed. Evaluation findings indicate that the program is effective in assisting unemployed older workers find employment (Boockmann and Brandle 2015). In fact, Perspektive 50 Plus has more positive evaluation results than job search assistance programs for older workers in other countries, possibly because of the comprehensive nature of the program. Evaluation findings also found men experienced better outcomes, though no explanation is provided as to why this would be the case.
Another example, from Canada, is the expired (March 2017) Targeted Initiative for Older Workers (TIOW). This FPT cost-shared initiative was focused on supporting re-entry into the labour market of unemployed persons between the ages of 55 and 64. The program was offered primarily in communities with populations of 250,000 or less that were experiencing high unemployment and/or downsizing and closures. Although there were variations in TIOW projects, they generally all provided: at least 25 hours per week of activity for participants; employment assistance services; and two employability improvement activities (for example, assessment, peer mentoring, skills training, wage subsidies, community-based work experience, preparation for self-employment, post-project follow-up and mentoring). Evaluation findings from 2014 indicate that program participants were more likely than non-participants to find employment (a difference of 6%). However, no employment earnings differences were found between program participants and the comparison group of older workers. In addition, a 2016 evaluation noted that participants were generally satisfied with the program and considered job seeking and employability activities to be helpful. A cost-benefit analysis was not conducted for the TIOW program interventions and services since the evaluation design did not include an incremental impact analysis. Also, it was not possible to calculate the average cost for the overall program because participant data was not available nationally.
Counseling and job search training/support
In a number of countries, unemployed workers can access publicly-funded and oftentimes publicly-delivered job search supports. These supports can take many forms including information sessions, workshops, coaching, and one-on-one counselling support. Job search supports are especially important for unemployed older persons because some of them have not had to look for employment in quite some time.
Evaluations of the Labour Market Development Agreements in Canada have looked at impacts of older worker participation in Employment Assistance Services. Incremental impacts on the incidence of employment and employment earnings have been found for older workers who are active EI claimants.
Evaluations of job search supports in other countries, including the United Kingdom, Switzerland, Belgium, the Netherlands, and Japan have found that these services:
- can assist unemployed older workers obtain employment, though there might be a time lag between the service offering and the employment impact. There is not much information available on the impact of these supports on the quality or duration of employment
- are more successful if they are short-term, intense in nature, and personalized to the older worker; and
- should be offered as early as possible after an older person becomes unemployed. Some job search supports are only offered to unemployed workers once they have been unemployed for a certain length of time (in other words, three to six months). However, evaluation findings suggest that being able to access services earlier can reduce the duration of unemployment
Additional findings of interest include:
- clients using one-on-one job search support through the New Deal 50 Plus program in the United Kingdom:
- appreciated seeing the same advisor over time, and
- would have preferred to have more advisory support even after obtaining employment
- one-on-one support and highly intense job coaching in Switzerland was found to:
- have positive effects on mid- and long-run life satisfaction, and
- be less effective for individuals aged 55 or over
Job matching
Job matching is intended to connect employers and older job seekers. This covers a broad spectrum of supports including:
- active measures, such as job placements and internships, and
- passive measures, such as websites specifically designed to connect older jobseekers and employers
There were few evaluation findings identified regarding these supports. The one notable exception is the Senior Community Service Employment Program (SCSEP) in the United States. The SCSEP provides subsidized minimum-wage, part-time community service assignments to low-income persons (in other words, in financial need) age 55 or older who would otherwise have poor employment prospects. An evaluation of the program found that, overall, 46% of SCSEP participants who exited the program and were available for employment, ended up entering unsubsidized employment (Mathematica 2012). However, there was substantial variation in outcomes across local projects. As well, employment rates were lower for more vulnerable groups, including participants with a disability, older workers, participants with lower levels of education, and those living in regions with high unemployment rates.
Matching employers with older job seekers can also be valuable as part of a larger employment program. For example, evaluation findings for the TIOW program found that linking participants to employers was valuable. This aspect of the project responded to the needs of employers for pre-screened, trained older workers.
Other
There are a wide assortment of other employment programs and services intended to support older jobseekers, including recruitment services, targeted support for older women and older persons seeking self-employment, and referral to other employment services. There were few rigorous evaluation findings identified for these programs and so it is difficult to draw any specific conclusions with respect to their effectiveness.
However, there are a few services with findings of note, including:
- the Over 50 Outreach Pilot Project in the United Kingdom which encourages the use of Jobcentre Plus back-to-work services through marketing and awareness activities. A study of the pilot project found that the marketing of employment services to those aged 50 or over worked best when it was personalized and tailored
- the Prince’s Initiative for Mature Enterprise (PRIME) in the United Kingdom which provides support (for example, information, workshops, training, network opportunities) for unemployed people over the age of 50 who are interested in self-employment. A 2010 survey of PRIME clientele found that 45% of those who contact PRIME start a business. However, it is not clear how many of these individuals would have started a business in the absence of PRIME or how well they can live on the revenue, making it difficult to draw specific conclusions
- an OECD report on Canada’s policies to improve labour market prospects for older workers notes that self-employment programs have been shown to increase hours worked, but this is not always accompanied by increases in earnings. Additionally, research has found that higher rates of self-employment among older workers participating in the labour market is more due to self-employed workers continuing to work as they get older than older persons becoming new entrants into self-employment (OECD 2012)
2.7 Workplace accommodations
Flexible work arrangements are a key factor in both retaining and attracting workers as they age. Specifically:
- as workers age, health and well-being considerations often increase in importance in their work decisions. For some workers, especially those in manual or low-skilled occupations, health can become a limiting factor in extending their working lives
- many older workers are seeking a change in their work-life balance as they approach retirement age in order to pursue other interests (for example, hobbies, time with family, volunteering) or take on other responsibilities (for example, care for family members or friends)
Various approaches can be taken to provide a more accommodating workplace, including part-time work, flexible or reduced work hours, and modified work tasks and environments. Workplace accommodations offer older workers opportunities to pursue their interests and meet caregiving responsibilities while remaining a part of the labour force.
As work tasks and business needs vary significantly across sectors and organizations, flexible work arrangements are most often developed at an organization-level and, in some cases, via collective bargaining agreements. From a public policy perspective, governments can support and encourage the introduction and maintenance of flexible workplace arrangements through financial incentives, legislation, and partial pension schemes.
As flexible work arrangements become more common across industries, partial retirement is becoming more accessible for older workers who are not interested in retirement or able to retire fully. Although flexible work arrangements can extend the working lives of some workers, the overall impact may be muted by the extent to which individuals who reduce their involvement in the labour force due to a flexible work arrangement, might not have done so if the arrangement had not been available. As an example, an evaluation of a pilot project in Norway where employees aged 62 and over could reduce their working time by 20% while still receiving full wages found that, on average, employees with reduced working hours carried on working longer before retiring. However, because some of those who reduced their working hours would have otherwise continued working full-time, the overall effect on the total supply of working hours was negative (OECD 2012b).
To the degree that evaluation tools, such as surveys, have been used in research on workplace accommodations for older workers, they tend to have focused on identifying changes in the offering or take-up of these arrangements and not on the impact on the labour market engagement of older workers. For example:
- in the United Kingdom, the Flexible Working Act provides all employees with a legal right to request flexible work arrangements.Footnote 12 Surveys of both employers and employees indicate that both the offering and the take-up of flexible work arrangements have increased since the legislation was put into place, but no evaluation findings were identified that specifically discussed whether the increase in flexible work arrangements led to an increase in the labour force engagement of older workersFootnote 13
- in Norway, employees over the age of 62 in the state sector have the opportunity to take extra days off work. A 2010 evaluation focused on employees over the age of 61 in the university sector found that, although employees valued the days off, the associated loss of income was a disincentive
Factors other than flexible work arrangements that have been suggested to also influence decisions of older workers about staying longer in the labour force include higher salary and feeling appreciated by management.
Research has found that younger retirees are more likely than older retirees to report that they would have kept working if alternative working arrangements had been available to them (Morissette 2004 cited in Belanger 2016).
The following constraints to workplace accommodations were mentioned in the reviewed literature:
- employers facing barriers in accommodating arrangements (for example, increased administrative burdens and costs), and
- employees facing challenges with flexible work arrangements, such as feeling less connected to their work environment, which can negatively impact their work satisfaction and/or quality of work (Eurofound 2016)
The focus of this report is exclusively on public policies and programs. However, given that workplace accommodations are most often implemented at the organization-level, future research in this area could be focused on organization-level initiatives. Findings could be shared with employers across industries to encourage the adoption of best practices.
With respect to public policies and programs, further research could focus on evaluating the change in total labour supply (in other words, hours worked) among older workers resulting from these policies and programs, as opposed to focusing simply on whether the availability and take-up of workplace arrangements for older workers is increasing.
3. Considerations for future policy and program development
Drawing broadly on the learnings gained from this environmental scan, the following are considerations for future public policy and program development aimed at encouraging labour force participation of older workers in Canada.
Need for additional evaluation research
There is considerable research available regarding factors that can influence decisions of individuals about retirement or continued labour market participation as they get older (for example, financial readiness, satisfaction with work, health, etc.). However, research on the specific influence of public policies and programs on these broader factors is relatively sparse.
This environmental scan found much supposition about the influence of various public policies and programs on the choices of older workers to remain active in, retire from, or re-enter the labour market, with sometimes limited or no rigorous evaluation research to back these suppositions up.
Additional evaluation work could be done, with findings integrated into public policy and program development. It would be beneficial for this evaluation work to look beyond aggregate results and identify variations in outcomes among different groups of older workers (for example, gender, occupation, income level).
Labour market decisions of older workers influenced by a diverse range of factors
Decisions about the extent and nature of involvement in work as one gets older are influenced by a broad range of factors, only some of which governments can influence. The diversity of the older population, including diverse interests, financial circumstances, and care obligations, is a consideration when developing policies and programs intended to extend the working lives of older workers.
Strategic and coordinated approach to policy and program development
Policy and program development to encourage and support labour market participation of older Canadians could benefit from a more strategic and coordinated approach, that would consider: the multiplicity of factors that can influence older workers’ decisions; the inter-relationships and potential for coordination with other policies and programs; the role of initiatives to support younger workers to be able to remain productive in the labour market as they age (for example, ongoing competency development and opportunities to use productivity-enhancing tools); and understanding the perspectives and intentions of workers throughout their careers about preparing for and transitioning into retirement.
Retaining older workers and preventing unemployment
Older workers who become unemployed can face challenges finding stable and good paying employment (ESDC 2016). Initiatives that focus on supporting older workers to remain employed (in other words, to prevent unemployment) will be important components of broader strategies to support older worker labour market participation.
Incentives may differ between low and high-income earners
Policy and program development aimed at influencing the labour market decisions of older workers is complicated by the diversity of the older worker population and the relative importance of - and interplay among - factors that individuals may weigh in their decision making. Differences in financial circumstances may be particularly relevant and call for consideration of different policy levers for low, average and high-income earners.
Public policies and programs could model and Support leading practices
Governments are large and influential employers and can model policies, programs and practices that evidence suggests support older workers continue to be productively engaged in work as they choose. Further, governments can support other employers that could also benefit from the contributions of older workers by helping to identify and share information about successful initiatives and practices.
Acceptability of policy alternatives by the Canadian public
In addition to understanding the potential efficacy of policy alternatives to encourage greater labour market participation of older workers, a better understanding of the acceptability of alternatives by the Canadian public would be useful.
Impact of leaves on the labour market participation of older workers
There are legislated job-protected leaves that could be useful to older workers when they are facing caregiver responsibilities (for example, family medical leave, family caregiver leave, critical illness leave, and family responsibility leave in the Employment Standards Act, 2000 (ESA)), personal illness (for example, sick leave in the ESA), and the death of a family member (for example, bereavement leave in the ESA). Legislated job-protected leaves, and employer-provided leaves (for example, through policies and / or collective agreements), may help older workers stay in the workforce while they manage caregiving responsibilities and health issues. This would be a Provincial/Territorial responsibility except for a small segment of the labour force.
Appendix A: Detailed evaluation findings
Table A 1: Financial incentives
Policy/Program description | Key findings |
---|---|
Jurisdictions: Various A number of countries (Austria, Belgium, Cyprus, Finland, France and Spain) have offered subsidies to employers as incentives to hire unemployed older workers. Some of these are targeted to specific groups of unemployed older workers (for example, low skilled). |
Evaluations of wage subsidy programs show mixed results. Those with methodologies that are more rigorous have concluded that wage subsidies are mostly ineffective (Eurofound 2013; Boockmann 2015). Subsidized work may displace unsubsidized work, with little net gain in employment of older workers. Only large and properly targeted subsidies can be expected to have substantial effects, limiting their cost effectiveness (Boockmann 2015). |
Jurisdiction: Canada Targeted Wage Subsidies may be offered by provinces/territories under Labour Market Development Agreements with the federal government. |
Evaluations of the Labour Market Development Agreements in Canada have found that older workers who are active and former Employment Insurance (EI) claimants who participate in Targeted Wage Subsidies have a higher incidence of employment and increased employment earnings compared to members of a comparison group (ESDC 2017). |
Jurisdiction: Finland A wage-subsidy program was available from 2006 to 2010 for low-wage workers aged 54 or older for full-time employment. The maximum amount of the subsidy was 16% of gross monthly earnings. |
A rigorous evaluation using a difference-in-differences design found a 1% increase in the employment rate, which is considered an insignificant effect. The subsidy was found to be equally ineffective among women and men (Boockmann 2015). |
Jurisdiction: Belgium Belgium has a wage subsidy in the form of a reduction in employers’ social security contributions for workers aged 58 or over (the age that early retirement becomes an option for most Belgian workers). The intent of the program is to counter early retirement. |
An evaluation using a conditional difference-in-differences approach found the program to be ineffective except for specific subsets of older workers (for example, men in the manufacturing sector) (Boockmann 2015). |
Jurisdiction: Austria Austria’s Come Back program uses unemployment insurance funds to provide employers with hiring subsidies for workers aged 45 and over. |
An evaluation found 65% of workers, regardless of age, retained their employment after the subsidy ended (European Commission 2012 cited in ESDC 2018a). |
Policy/Program description | Key findings |
---|---|
Jurisdiction: United Kingdom The New Deal 50 Plus employment credit was part of a broader Welfare to Work initiative. It focused on unemployed people aged 50 and over receiving benefits for six months or more who wished to return to work. Participation was voluntary. A tax-free wage top-up for those finding work (in other words, an Employment Credit) was available for participants for up to one year. The Employment Credit was a weekly payment of £60 for those working 30 or more hours / week or £40 to supplement part-time work of 16 to 29 hours/ week. An annual income threshold of £15,000/year was required to be eligible. The program also offered one-on-one job search with a New Deal Personal Adviser (NDPA) and a training grant. |
Longitudinal qualitative evidence found job retention to be high after the Employment Credit ended. The clients who returned to unemployment benefits after working six months were more likely to be male, disabled, 65 to 69 years of age, single (or divorced or cohabiting), self-employed, in a full-time job, or had previously claimed disability or income support. The evaluation approach (in other words, not involving a comparison group) makes it difficult to draw firm conclusions about the effects of the Employment Credit on work retention (DWP 2010). |
Policy/Program description | Key findings |
---|---|
Jurisdiction: Canada Since 2007, Canada’s Income Tax Act and regulations have allowed taxpayers to be both contributors and beneficiaries of a defined benefit registered pension plan at the same time. Contribution limits for personal savings through RRSPs are set annually. Allows pension income splitting except for CPP/QPP and OAS pension income. |
None identified. |
Policy/Program Description | Key Findings |
---|---|
Jurisdiction: Australia An earned income tax credit of up to $500 was available between 2004-2005 to 2014-2015 to incentivize workforce participation of older workers. It has been estimated that the MAWTO cost the Australian Government roughly $4.3 billion in forgone tax revenue over the 10 years it was available. |
A study using administrative data and a difference-in-difference approach found that the MAWTO had a small positive effect on labour supply, increasing labour market participation by around 0.5%. It was concluded that the modest tax offset ($500) led to modest behavioural change, and that other factors likely influenced results (for example, health status, job satisfaction, partner's retirement status or desire for more leisure time). It was estimated that most credit recipients would have remained in the workforce without the tax offset, resulting in each participant costing the government between $37,000 and $78,000 (Breunig and Carter, 2018). |
Table A-2: Workplace Health and Safety
Policy/Program description | Key findings |
---|---|
Jurisdictions: Various Austria: Fit2work provides free services, such as medical exams, advice on training, assessment of current work and health situation, and individual coaching. It is open to employees of all ages, but it is expected that the majority are older workers. Netherlands: Health checks (Pago) is available for all workers, but it is recommended that older workers make greater use of this service. Germany: Integration of health management into training and management development programs |
Little evaluation evidence is available about the impact of such measures (Eurofound 2013). |
Policy/Program description | Key findings |
---|---|
Jurisdiction: Sweden Public Employment Service’s rehabilitation services provides assessments to determine if an employee can handle their current work, and if not, whether task modification or other available options exist. |
Research in 2010 found that this initiative helped workers over age 45 return to work more so than younger workers (ESDC 2017a). |
Policy/Program description | Key findings |
---|---|
Jurisdiction: Nova Scotia The Small Business Safety Toolkit is intended to help small businesses put a health and safety system in place to: protect workers; help workers to learn basic duties and responsibilities under the Nova Scotia Occupational Health and Safety Act and Regulations; and assist them to understand how health and safety plays a role in day-to-day business operations. |
None identified. |
Table A-3: Retirement income system
Policy/Program description | Key findings |
---|---|
Jurisdiction: Canada The OAS program is the age-related component of Canada’s public pension system. It is available to everyone who meets the resident and age criteria. It is financed through general tax revenues. Since 2013, OAS can be deferred for up to five years, increasing payments by 0.6% for each month deferred past age 65. There are no restrictions on working while receiving OAS benefits, however, OAS recipients with income in excess of an annual threshold amount ($77,580 in 2019) begin repaying their pension through the OAS Pension Recovery Tax. |
The deferral of the OAS pension has not been evaluated since it was introduced in 2013. |
Policy/Program description | Key findings |
---|---|
Jurisdiction: Canada A monthly non-taxable benefit for low-income OAS recipients. Applicants with less than 10 years of residence in Canada may be eligible for GIS if they qualify under an International Social Security Agreement. The federal Budget 2019 proposed that the GIS earnings exemption would be increase from $3,500 to $5,000 beginning with the July 2020 to July 2021 benefit year. Allowances may be paid to low-income spouses/common-law partners or low-income survivors of GIS recipients, if aged 60 to 64. |
An analysis of descriptive statistics found average employment income was higher (by 14%) after the GIS earnings exemption was increased in 2008 among GIS recipients who were working. No conclusive evidence was found concerning the impact of the policy change on employment rates of GIS recipients. (ESDC, Evaluation of the Old Age Security Program: Phase 1, 2018). |
Policy/Program description | Key findings |
---|---|
Jurisdiction: Canada CPP/QPP are the work-related components of Canada’s public pension system. The plans provide retirement, disability and survivor benefits for individuals who have contributed. The CPP was reformed between 2011 and 2016. Changes included actuarial adjustments that increased benefit reductions for individuals starting the CPP early (in other words, aged 60 to 64) and benefit increases for individuals starting the CPP later (in other words, age 65 to 70) (ESDC 2018). Delaying receipt of CPP until age 70 can increase the benefit amount by up to 42%. The requirement to have ceased working for a period before being eligible to receive CPP/QPP was also eliminated in the most recent round of CPP reforms (in other words, the work cessation requirement). CPP/QPP benefits are taxable (not eligible for the pension income tax credit) and ineligible for pension income splitting under the Income Tax Act. However, pension sharing is allowed (in other words, transferring payments from one spouse to the other). CPP/QPP pension amounts are indexed annually. |
Simulation research found that the most efficient policy to promote delaying retirement was the removal of the work-cessation requirement for CPP/QPP. Actuarial adjustment of benefits (in other words, reduction prior to age 65 and increase after age 65) was found to be potentially less efficient (Pollock and Sargent 2004 cited in Belanger et al. 2016).
Canada’s public retirement income system offers offer only modest income replacement for people who have had average (or higher) lifetime earnings and, consequently, does not provide a strong incentive for early retirement. However, the system offers relatively high-income replacement for low earners and may have significant influence on decisions to retire (Baker et al. 2003, Chen et al. 2012, and Milligan and Schirle 2006 cited in Belanger 2016). Actuarial reviews of the CPP and QPP occur every three years. CPP reviews indicate that the program is sustainable at current contribution rates for the 75-year projection period. A 2003 review of the QPP indicated a sustainability issue if the contribution rates did not increase over the projected period. Contribution rate increases introduced after this review have now been completed. Early retirement incentives under CPP/QPP are relatively small compared to other OECD countries (Fougere 2009 cited in Belanger 2016). The average OECD income replacement rate is 54%, compared to 45% for median earners in Canada (Belanger et al. 2016). Research has found that a public pension system can influence the labour force participation of women at age 60 (Lefebre et al. 2011 cited in Belanger 2016). |
Policy/Program description | Key findings |
---|---|
Jurisdiction: Canada Canada does not require employers to offer pension coverage on top of public pensions. Over 60% of Canadian workers do not have private employer sponsored pensions. Federal pension legislation applies in Yukon, NWT, and Nunavut and in sectors covered under the Federal Pension Benefits Standards Act (for example, banks). Changes made in 2007 to the Income Tax Act allowed provincial pension legislation to allow individuals to continue to contribute to defined benefit pension plans while receiving partial pension benefits. AB and BC have harmonized their provincial pension standards. Pooled retirement pension plans (PRPPs) were introduced in Canada in 2012 for small businesses and the self-employed. Employers and employees both contribute to these plans. The plans allow for pooled investment of contributions and the spreading of administration costs across many companies. PRPPs are now available in several provinces, and as other provinces enact legislation governing PRPPs, the plans will become available in more jurisdictions. |
A study found 40% of workers would keep working if they could collect their pension while continuing to work (Pignal 2010 cited in Belanger 2016). |
Policy/Program description | Key findings |
---|---|
Jurisdictions: Netherlands The VUT provided benefits upon early retirement covering approximately 80% of the individual’s last salary. In 2006, the Dutch government made its first step towards promoting active aging by abolishing the VUT (with some transitional provisions). |
The average retirement age in the Netherlands began to increase in 2007, with the proportion of workers 65 or older at retirement doubling in five years (from 15% in 2006 to 30% in 2011). Over that same period, the proportion of workers retiring before age 60 decreased. However, evaluation findings using a difference-in-difference analysis found that the elimination of the VUT did not influence workers’ expected retirement age. Further, it appears to have led to an increase in take up of unemployment and disability benefits suggesting changes in one benefit program can cause people to leave the labour market by using other programs (Bauer 2013). |
Policy/Program description | Key findings |
---|---|
Jurisdiction: Netherlands In 2009, the Dutch government introduced a work-continuation bonus that was applicable to individuals who continued working after age 62 and involved a discount on taxable income. |
Evaluation findings using Longitudinal Internet Studies for the Social Sciences (LISS)Footnote 14 and applying a difference-in-differences approach found that the working bonus led to an increase in the expected retirement age of older workers relative to their younger peers. On average, after the introduction of the bonus in 2009, older workers are expected to retire approximately one year and seven months later than younger workers (Soca 2013). |
Policy/Program description | Key findings |
---|---|
Jurisdiction: Finland Working hours and salary of the employee must decrease to between 35% and 70% of the full-time equivalents. The pension fund then compensates half of the loss in salary. Until 2017 workers could enrol in the scheme at age 61 if they had been in full-time employment for at least 12 months during the previous 18 months. The employer must approve an employee’s enrolment in the scheme and it is not open to people who are already fully retired. |
Based on macro-data, the impact of partial retirement on the length of working lives (and more so the hours contributed to the economy) is not clearly positive at the aggregate level (Eurofound 2016). Results of a 2007 survey of partial retirees indicated 49% would have continued working full time without the scheme, which supported surveys done in 1995 and 2001 (Takala and Vaananen 2016). The survey also showed that partial retirement can extend working lives for some groups. It was found that 29% of partial retirees opted for the scheme because full-time work was too demanding or for health reasons. These people may not have been able to work full-time for as long as they were able to work part-time (Eurofound 2016). A critique of the scheme is that it effectively provides a subsidy for workers with higher-incomes. It is speculated that relatively fewer low-income workers participate in the scheme because they cannot afford a decrease in salary or future pension accumulation (Eurofound 2016). |
Policy/Program description | Key findings |
---|---|
Jurisdiction: Austria The TTR scheme allowed employees to begin an account-based pension while they were still working. It allowed those between 55 and 59 to reduce their working hours without loss of income by topping up their part‑time wage with their superannuation savings. The intention was to provide an opportunity to ease into retirement and take advantage of tax concessions available to pensioners. While working, their employer and member contributions continued to be paid into their superannuation account. |
There is limited evidence that the TTR did not achieve its aim of facilitating a gradual transition from work to retirement (Taylor 2016). Specifically, a study of members of UniSuper (an industry superannuation fund for university employees) found that few identified TTRs as a practical pathway to retirement, instead of focusing on its tax minimizing benefits (deVries 2009). |
Policy/Program description | Key findings |
---|---|
Jurisdiction: Various EU Member States Over half of the EU Member States and Norway have national or sector-level partial retirement schemes that replace part of the income loss from reduced participation in the workforce with a partial pension or benefit. The schemes vary in intent, coverage and design. |
According to the European Foundation for the Improvement of Living and Working Conditions, no scheme was identified that unambiguously extended the working lives of all participants. Partial retirement can extend working lives for some (for example, those with health problems, care responsibilities, disabilities and physically or mentally demanding jobs), but is more likely to shorten them. At the aggregate level, the reduction in hours facilitated by partial retirement has frequently outweighed the increase in hours arising from lengthening the working lives of some participants (Eurofound 2016). Workers in lower paying jobs are often unable to afford reducing their working hours even if their wage loss is partly compensated. Questions of fairness arise if the scheme is used by high-income individuals or is not available to individuals already working reduced hours (Eurofound 2016). |
Policy/Program description | Key findings |
---|---|
Jurisdiction: Various Provisions in pension systems that provide the possibility to increase pension benefits by working additional months/years. |
The is some evidence that these incentives can raise retirement ages but may be less effective in extending working lives of older people in better-paid jobs, where the motivation to stay may be more closely linked to job satisfaction. Financial incentives appear to be more important to lower-paid workers. (Eurofound 2013). |
Table A-4: Skills development
Policy/Program description | Key findings |
---|---|
Jurisdiction: EU Member States Austria, Belgium, Germany, Latvia, Luxembourg, Portugal, Romania and the UK, offer publicly funded education and training programs specifically aimed at providing in-work skill updating support for older workers. |
Data suggest that older worker participation in in-work training is increasing, but there is no further information on the impact of these training measures on extending the careers of older workers (Eurofound 2013). |
Jurisdiction: Latvia An in-work training measure for unemployed persons aged 50 and over involving employers being paid to provide coaching/training for older workers. The intention of the measure is to help older unemployed persons find a job regardless of previous employment, skills and education. The worker is hired for 12 months and the Latvian State Employment Agency contributes 50% toward wages up to the minimum monthly salary. |
Between 2008 and 2012, 1,033 unemployed persons started the program, with 80% of those completing the program finding a permanent job (Eurofound 2013). |
Policy/Program description | Key findings |
---|---|
Jurisdiction: Various EU Member States Most of the training for unemployed older worker is delivered through government programs also open to other groups that can experience challenges in the labour market. Only a few jurisdictions have programs that focus specifically on older workers (examples include Germany, Poland and Portugal). |
Generally, there is little evidence on program outcomes. Most data focuses on outputs (for example, number trained), and programs generally show positive results for the number of individuals trained. Older workers often represent 15% to 45% of total participants. The limited outcome data available for these programs suggest a 25% to 50% employment rate after training, however, the quality and sustainability of the jobs is not known (Eurofound 2013). |
Jurisdiction: Canada Skills Development is offered by provinces/territories under Labour Market Development Agreements with the federal government. |
Evaluations of the Labour Market Development Agreements in Canada have looked at impacts of older worker participation in Skills Development. Results demonstrate that participation in Skills Development by older workers who were active and former EI claimants increased the probability of employment and employment earnings compared to comparison group members. Among active claimants, older workers who participated in Skills Develoment had the largest cumulative gain in earnings (ESDC 2017). |
Jurisdiction: Nova Scotia Nova Scotia’s Skills Development (SD) program provides support to unemployed eligible Nova Scotians that need basic to advanced skills training to improve their employment prospects but are otherwise job ready. Participants can include older persons. Training is full-time. |
None identified. |
Jurisdiction: Ontario Under the Ontario Workplace Safety and Insurance Board (WSIB) policy, a worker who is 55 years of age or older when the WSIB determines he/she is entitled to loss of earnings (LOE) benefits, and who requires a Workplace Transition plan (vocational skills training) to achieve employment in a suitable occupation (SO) has two options: 1. Participating in a WT plan aimed at achieving the SO, or 2. Choosing a 12 month Transition Plan (TP) focused on self-directed work reintegration to achieve the SO. |
None identified. |
Policy/Program description | Key findings |
---|---|
Jurisdiction: United Kingdom The WBLA scheme was a voluntary training program aimed principally at those 25+ who were on Jobseekers Allowance for over six months. The program offered training in a variety of occupational skills to increase participants’ employment prospects. |
Evaluation results for the WBLA found participation increased the probability of work (any hours) by 17 to 18% among individuals aged 50 and over. |
Policy/Program description | Key findings |
---|---|
Jurisdiction: United Kingdom The Skills Coaching service was targeted to jobseekers with a skills deficit that could affect their employability and to individuals in receipt of income benefits who might improve their long-term job prospects through additional training. This program did not specifically target older workers, but older workers were among the program’s participants. |
Individuals aged 50 and older were more likely to exit the program early and less likely to achieve a work-related outcome. Compared to an overall exit rate of just under 14%, 22% of participants aged 55 and older or above left the program early (DWP 2010). The prospect of full-time employment following program completion decreased with age. However, multivariate analysis found those aged 50 and older were the most likely to start part-time work. (DWP 2010). |
Policy/Program description | Key findings |
---|---|
Jurisdiction: United Kingdom This was part of the UK’s Welfare to Work initiative. It targeted people over 50 who had been out of work and on benefits for six months or more and wished to return to work. Participation was voluntary. In-work training was one of the program components. A training grant of up to £750 (later increased to £1,500) was available during the first year of employment following the program. |
Take up of this training was low, with only 4% to 6% of eligible individuals choosing to participate. Feedback from potential participants indicated reasons for low take-up included (DWP 2010): lack of awareness of how the grant worked; a feeling of being too old to learn new skills; not seeing the benefit of training and feeling like the training was superfluous to specific job tasks; a feeling that the training grant was not compatible with existing in-house training; a lack of time; and poor choice of training opportunities. |
Policy/Program description | Key findings |
---|---|
Jurisdiction: Canada A voluntary program to assist CPP disability benefit recipients return to work. |
Research using administrative data, a comparison group methodology, and sensitivity analysis found modest, and imprecisely estimated, impacts on employment outcomes for men. Larger, and in some cases statistically significant, impacts were found for women. Labour market outcomes suggest a positive cost-benefit result (Campolieti et al. 2014) |
Policy/Program Description | Key Findings |
---|---|
Jurisdiction: United States Two initiatives highlighted in the literature are:
|
Information on these initiatives focuses more on outputs than outcomes. Since 2008, Plus 50 has given grants to 138 community colleges, which have collectively enrolled 37,494 students aged 50 and older in workforce development programs. Since 2010 to 2011, 2012,192 baby boomers have completed a degree or certificate (ESDC 2017a). The home care program trained 424 older individuals, ultimately placing 218 of them in unsubsidized employment as community health workers (ESDC 2017a). |
Table A-5: Employment Programs and Services
Policy/Program description | Key findings |
---|---|
Jurisdiction: Canada FPT cost-shared initiatives to support the re-integration of unemployed individuals primarily between ages 55 to 64 into employment. Program was initially offered in communities with populations of 250,000 or less that were experiencing high unemployment and/or downsizing and closures. In 2014, two new community eligibility criteria were introduced: unfilled employer demand and skill mismatches. The federal investment in the program was $75 million from 2014 to 2017. There were some variations in the funded TIOW projects, although all were required to: involve at least 25 hours per week of activity; provide employment assistance services; and offer at least two employability improvement activities (for example, assessment, peer mentoring, skills training, wage subsidies, community-based work experience, preparation for self-employment, post-project follow-up and mentoring) |
A 2010 evaluation found that TIOW successfully reintegrated unemployed older workers: 75% of participants surveyed found employment during or after participation (OECD 2012a). A 2014 evaluation using a non-experimental design (with a participant group and a comparison group of older workers) found that program participants were more likely than non-participants to find work (a statistically significant difference of 6%). No difference in earnings was found (ESDC 2016). A 2016 evaluation used an exploratory/ investigative approach. Findings from British Columbia, the Yukon and Nova Scotia suggested that the program in those areas was progressing towards the intended outcome. Participants were generally satisfied with the program and considered job seeking and employability activities helpful. A review of programs in other jurisdictions concluded TIOW was effectively designed and delivered. Similar programs in other jurisdiction were successful at producing higher levels of employment, earnings and job satisfaction. It has been found that peer support motivates participants and positively correlates with job search intensity; and that careful identification, screening and selection of participants and ongoing support in establishing employment goals enhances potential for employment success (ESDC 2016). |
Policy/Program description | Key findings |
---|---|
Jurisdiction: Canada Employment Assistance Services are offered by provinces/territories under Labour Market Development Agreements with the federal government. |
Evaluations of the Labour Market Development Agreements in Canada have looked at impacts of older worker participation in Employment Assistance Services. Incremental impacts on the incidence of employment and employment earnings have been found for older workers who are active EI claimants (ESDC 2017). |
Policy/Program description | Key findings |
---|---|
Jurisdiction: United Kingdom The New Deal 50 Plus focused on unemployed people aged 50 and over receiving benefits for six months or more who wished to return to work. Participation was voluntary. One-on-one job search support from a New Deal Personal Adviser (NDPA) was one of the elements of the program. |
Qualitative evidence indicates clients may not choose to see an advisor because they believe: they are being ‘pushed’ into work; do not think the service would be helpful, or are confident in finding their own job. Those who used the service were generally positive about their experience and appreciated seeing the same adviser over time (DWP 2010). Those who found work were more positive about their experience and would have liked more advisory support even after finding work, especially towards the end of the Employment Credit payments (DWP 2010). |
Policy/Program description | Key findings |
---|---|
Jurisdiction: Germany This job search assistance program targets unemployed recipients of welfare benefits aged 50 and older. Regional delivery varies somewhat, but the program typically provides coaching and counselling, short-term training, and advice on other matters as needed (for example, debt, health, addiction). Although employment subsidies can be provided through the program, they affect only a small share of participants. |
Using a difference-in-differences methodology and propensity score matching, positive effects have been found, suggesting that job search assistance programs of this type are effective with older workers. Evaluation findings were better for Perspektive 50 Plus than job search programs in other countries for older workers, possibly because of the comprehensive nature of the program (for example, age-specific measures addressing health problems, mobility challenges, care obligations and other obstacles for placement) (Boockmann and Brandle 2015). Effects were larger for men (Boockmann and Brandle 2015). |
Policy/Program description | Key findings |
---|---|
Jurisdiction: Switzerland An experimental project specifically targeted to job seekers age 45 and older with lower employability prospects. Service features included early intervention, individual adaptation, and frequency. One-on-one support was provided every second week, along with highly intensive coaching in small groups for over 50 days. The small group coaching focussed on job search strategy, self-marketing and employability development. The experimental project was carried out in two Public Employment Service (PES) offices. |
Among the evaluation findings (Arni 2010, 2011):
A significantly higher proportion of individuals who received the service found a job in comparison to those who did not receive the service; earlier coaching reduces unemployment duration; employability coaching increases job search motivation; participation has a positive effect on mid and long-run life satisfaction; the program is less effective for individuals aged over 55. Findings relevant to developing similar programs targeted at older job seekers suggest it is best to use short and intense programs, provide intervention as early as possible, and monitor progress (Arni 2011). |
Policy/Program description | Key findings |
---|---|
Jurisdiction: Belgium This scheme applies to individuals aged 50 to 53 who are unemployed for more than three months. Participants attend an information session and select one or more of the following activities: job search assistance; participation in a job club (where job search skills are taught and applied collectively); or vocational training. The scheme focuses more on job search activities and counselling, and less on training. Specialized counselors monitor and provide counselling for participants. |
Estimation results suggest the scheme has an impact on employment, although there is a time lag. An employment gain of 3% to 4.5% four to seven months after participation has been observed. Information was not available on the impact on the quality or duration of jobs (Bollens 2011). Areas of future investigation include (Bollens 2011): whether the effects are independent of labour market conditions and the business cycle at the time; the influence of non-compliance; and cost-benefit analysis. |
Policy/Program description | Key findings |
---|---|
Jurisdiction: United Kingdom Initiative to raise awareness and encourage the use of Jobcentre Plus back-to-work services by inactive people (in other words, individuals neither employed nor unemployed) over the age of 50. Individuals were offered information, awareness raising and referral services. |
Research has found (Jones and Griffiths 2011): Marketing of services to those aged 50 and older works best when it is personalised (face-to-face contact) and tailored. Outreach events offering a range of information and advice are more effective for attracting interest than leaflets and poster campaigns. Outreach workers in the same age group were generally perceived as better able to empathize with the older participants. |
Policy/Program description | Key findings |
---|---|
Jurisdiction: United States The SCSEP is targeted at low-income persons aged 55 or older with poor employment prospects. The program provides subsidized minimum wage, part-time community service assignments. One of the program’s objectives is to increase the number of older persons who enter unsubsidized employment in the public and private sectors. Participants are diverse in terms of education, age, work history, employment barriers, eligibility for retirement pensions and other public benefits. In 2011, the program budget was $450 million and had 46,103 participant positions. The implied annual cost per position was approximately $9,700. Program participation is limited to 48 months. |
A process and outcomes evaluation was carried out using 2009 to 2010 data. It found that 46% of participants who left the program and were available for work ended up in unsubsidized positions. Employment rates were lower for those with a disability, older workers, those with lower education levels, and those living in areas of high unemployment. The likelihood of entering unsubsidized employment declined with age. There was substantial variation in outcomes across projects: 10% had placement rates below 18%; while the top 10% had placement rates above 69% (Mathematica 2012). Other data indicates that the program offers significant social and emotional benefits for participants and that the average level of participant satisfaction is significantly higher than for other government programs (Mathematica 2012). |
Policy/Program description | Key findings |
---|---|
Jurisdiction: United Kingdom The objectives of this program are to reduce unemployment and social isolation. It targets people over 50 who want to become self-employed. The program provides free information workshops, training, networking events and access to (free or low-cost) business advice via accredited advisors. Some regions may offer free training and mentoring. |
A 2010 survey of PRIME clientele found that 45% of those who contact PRIME start a business, and only 15% abandon their business ideas (OECD 2012c). It is estimated that PRIME helped more than 2,250 people over 50 start a new business in 2010 – 2011 (OECD 2012c). |
Policy/Program description | Key findings |
---|---|
Jurisdiction: Various Several countries (for example, Netherlands, Japan, and United Kingdom) use workshops to help older workers develop job search skills. Program/service offerings may include resume writing, interview techniques, career planning, and understanding the labour market. Sometimes workshops are paired with other initiatives such as developing work-related skills, networking and job matching. |
Workshop programs have been effective and have led to high rates of re-employment among participants (ESDC 2017a). The effectiveness of workshops may depend on other factors such as the attitudes of employers and their level of awareness of hiring older people (ESDC 2017a). |
Policy/Program description | Key findings |
---|---|
Jurisdiction: Canada Assist individuals create jobs for themselves by starting a business or becoming self-employed |
Evaluation of self-employment programs show that they increase hours worked, but not always earnings (OECD 2012a). Most observed increases in self-employment rates with age result from higher rates of work continuation among the self-employed compared to paid employees. Entry into self-employment from non-employment plays a smaller role (Schuetze 2015). |
Policy/Program description | Key findings |
---|---|
Jurisdiction: South Korea To counter age discrimination and maintain labour supply, South Korea has affirmative action legislation identifying 77 occupations for which priority in hiring is to go to older workers. |
None identified. |
Policy/Program description | Key findings |
---|---|
Jurisdiction: Belgium In Belgium, since 2013 all companies with 20 or more employees must include in their collective agreements a plan of action for the employment of individuals aged 45 or older. The plan may contain a variety of obligations, such as the recruitment of a number of older employees, development of career plans and career management, internal job mobility, and task rotation. |
None identified. |
Policy/Program description | Key findings |
---|---|
Jurisdiction: South Korea Businesses in South Korea are required to ensure that at least 3% of their workers are aged 55 or older. |
None identified. |
Table A-6: Workplace accommodation
Policy/Program description | Key findings |
---|---|
Jurisdiction: Norway A pilot project conducted to see if reduced hours with full pay would influence older workers’ decisions to delay retirement. The program ran in four agencies between 2007 to 2009, offering employees over age 61 a 20% reduction in their work hours with full pay. |
On average, employees with reduced working hours worked longer before retiring, and a small health and welfare gain was found. However, employees who would have worked longer without the offer of reduced working time reduced their working hours as well. An overall decrease in the total supply of working hours was found (OECD 2012b). |
Policy/Program description | Key findings |
---|---|
Jurisdiction: United Kingdom The UKs’ Flexible Working Act (2003) gives an employee the right to ask for a flexible work arrangement (for example, job sharing, telework, compressed work week, part-time, staggered hours or phased retirement). To be eligible, the employee must have worked for the same employer for at least 26 weeks. While an employee has a right to request a flexible work arrangement, an employer may refuse if they have a good business reason. |
A 2008 employer survey found that 95% of workplaces surveyed offered at least one of six flexible working arrangements to employees. This was an increase from 88% in 2003. Employers allowing reduced hours increased from 40% to 74%. The take-up of these flexible work arrangements increased during this same period but at a slower rate than availability. An employee survey found 95% reported at least one flexible work arrangement was available to them if they needed it, an increase from 85% in 2003 (Danziger 2008). |
Policy/Program description | Key findings |
---|---|
Jurisdiction: Norway As of 2002, employees over age 62 in the state sector have had the opportunity to take extra days off work. This collective agreement provision is to encourage older workers to remain in the labour force longer. |
An evaluation of the program found that older workers liked extra days off but found it hard to take them. Having extra days off contributed to job satisfaction (Eurofound 2013a) and helped older workers remain in the work force however, other factors (in other words, higher salary, reduced hours, and being appreciated) were also important. |
Policy/Program description | Key findings |
---|---|
Jurisdiction: Ontario The goal of this initiative was to increase the retention of nurses over age 55 by reducing physically or psychologically demanding duties by 0.20 FTE, and making that time available for engaging in special projects. |
Participation in the initiative did not appear to impact length of service or intention to leave current job (Doran et al. 2015). |
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