Denmark

Promoting longer working lives is vital for Denmark’s future prosperity

 

21/9/2015 - Encouraging more people to continue to work later in life would help Denmark meet the challenges of its rapidly ageing population. The ratio of the population aged 65 and over to the working-age population is projected to increase from 30% in 2012 to 43% in 2050, according to a new OECD report.

 

Working Better with Age in Denmark reports that some progress has been made as the employment rate for older people in Denmark has risen over the past decade. Denmark has carried out major reforms in recent years to reduce generous incentives and provisions for early retirement to reduce the burden of an ageing population.

 

However, the proportion of older people in Denmark who are working still remains well below the highest achievers among OECD countries: in 2014, the employment rate of 55-64 year olds was 63%, compared with 74% in Sweden and 84% in Iceland, and it was only 16% for the age group 65-69, compared with the OECD average of 20%.

 

Older workers who lose their jobs also face a high risk of long-term unemployment. The share of unemployed people over 55 who have been out of work for 12 months or more increased from 38% in 2007 to 42% in 2014, well above the 30% share for unemployed people aged 25-54.

 

 “Further reforms are needed in Denmark to encourage active ageing and longer working lives,” said Mark Keese, OECD Head of Employment Analysis and Policy launching the report in Copenhagen. “Employers need to do more to hire older workers in regular jobs when expanding their workforces.”

 

 Among its recommendations, the OECD says Denmark should:

 

  • Enhance work incentives for people approaching retirement age and even beyond. More information is needed to help people make well-informed choices between work and retirement.
  • Ensure greater age-neutrality in the functioning of the labour market. In particular, getting the balance right between job security for older workers and a flexible labour market could prove to be more challenging with the postponement of statutory retirement. One stress test is to prevent older job applicants from being discriminated against based solely on the fact that they are close to the retirement age.
  • Move ahead with abolishing mandatory retirement ages in the public and private sectors. This is especially crucial in those sectors and occupations facing labour shortages, such as the health and care sector and the trade sector.
  • Evaluate which measures work best to promote longer working lives, and create networks for sharing experience among employers.
  • Encourage transitions back to regular jobs for older workers who have lost their job, and prevent inactive periods and early exit from the labour market. In particular, seniorjobs, which are sheltered jobs accessible only to a selected group of registered older unemployed, should be phased out, or at least reformed to give stronger incentives for a return to regular jobs. In addition, regular assessment of employability is essential for flexjobs, which are subsidised jobs offered to disabled people who are not able to fill a normal full-time job.

 

For further information or comments, journalists should contact Anne Sonnet (+33 1 45 24 91 69) at the OECD’s Employment, Labour and Social Affairs Directorate. The report is available on request to news.contact@oecd.org.

 

Working with over 100 countries, the OECD is a global policy forum that promotes policies to improve the economic and social well-being of people around the world.

 

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