Germany – OECD Urges to Extend Seniors’ Employment

Source: Four Pillars Newsletter No 38, March 2006 – published by The Geneva Association

Germany should reform its employment policies and workplace practices to enable older people who wish to continue working to do so, according to a 2005 OECD report. Today, many older Germans stop working well before reaching the statutory retirement age of 65. As a result, only two out of five people in Germany between the ages of 55 and 64 are employed, well below the ratio in most other OECD countries. By comparison, about three out of five people in this age group are still active in Britain and the US and more than 70% in Sweden.

Unless this situation changes, Germany could face labour shortages, slowing economic growth and worsening public finances, the OECD report warns. The problem is especially acute in the former East German States, where birth rates are lower and many younger, skilled workers have emigrated to take advantage of job opportunities in western Germany.

Part of an OECD series on Ageing and Employment Policies, the report on Germany outlines barriers to the employment of older workers and gives policy recommendations for action to overcome them, aimed at both the German Government, employers, trade unions and older workers themselves. While a lot has been done in recent years to encourage older workers to carry on working, it is important that the new government keeps up the momentum of reform.

Specifically, the OECD recommends that Germany should:

• Raise the retirement age in line with rising life expectancy. While the OECD welcomes the incoming government’s plans to raise the retirement age in the long term to 67, it says action may be needed earlier than in 2008, as currently planned.
  
  
• Introduce job-search requirements for all, irrespective of age. Incentives to retire before the official retirement age or to withdraw from the labour market by taking advantage of disability pensions or unemployment benefits combined with exemptions from job-search requirements should be removed. Early retirement schemes for the long-term unemployed should be phased out faster. Every person registered as unemployed should be required to look for a job.
  
  
• Improve the employability of older workers. Training programmes for older workers, especially for the low- and medium-skilled, are urgently needed in order to help older workers who lose their jobs to find new employment.

For further comment or information, you can contact the report’s author C. Prinz ( This e-mail address is being protected from spam bots, you need JavaScript enabled to view it or tel. +33-1-45-24-94-83) or the Head of the OECD’s Thematic Review of Ageing and Employment Policies, M. Keese ( This e-mail address is being protected from spam bots, you need JavaScript enabled to view it or tel. +33-1-45-24-87-94).

Ageing and Employment Policies - Germany – Vieillissement et politiques de l'emploi