Incentive Systems for Continued Employment of Older Workers

In the past decades all EU countries reformed their old age pension systems, with the target delaying retirement. Although early retirement schemes were mainly abolished, employment rate of older workers increased very slowly. Based on different economic theories we evaluate empirical findings of pension reforms on retirement age and employment rate of elderly workers. The point of retirement depends on various circumstances: first of all there are substitutionary and complementary effects within the different parts of the social security (unemployment and health system, etc.) which determine retirement age. Various reforms in different countries show that financial incentives for employees are effective if they are accompanied by the respective labour demand for elderly workers.