08/09/2005 - According to a new OECD report, Austria faces major challenges in relation to population ageing and the employment of older workers. As a result of declining mortality and persistently low fertility, the share of the population over age 65, is projected to double by 2050, and the working-age population could decline from 2018 onwards (Figure 1). The likely decline in labour supply will lower economic growth while public social expenditures continue to grow.
Part of a series of OECD country reports on Ageing and Employment Policies, the OECD report on Austria contains a survey of the main barriers to employment facing older Austrians, an assessment of the adequacy and effectiveness of existing measures to overcome these barriers and policy recommendations for further action by the Austrian government, employers, trade unions and older workers themselves.
The OECD report acknowledges that, since the mid-1990s, attitudes of policy makers towards older workers have been changing. Recent pension reform in particular is an unmistakeable sign of the change in policy stance. Various measures to complement pension reform have been taken to help improve labour market opportunities for older workers, including incentives for employers to retain and to hire older workers and efforts by the Labour Market Service to promote the employability of older workers.
Despite these reforms, the OECD argues that attitudes of employers and employees appear to be changing very slowly and existing pathways into early retirement are still used extensively. The OECD points out that many older Austrians withdraw from the labour market well before reaching the statutory or even the early retirement age (Figure 2). Consequently, only one in three persons aged between 55 and 64 participate in the labour market in Austria, which is significantly lower than in most other OECD countries. The situation has improved only modestly since 1995 (Figure 3).
Recommendations for reform
According to the OECD, if Austria is to successfully meet the challenges of population ageing a comprehensive, whole-of-government approach is needed to encourage older workers to continue working longer. One the one hand, the pension system needs to be strengthened further and complemented by reform of the disability pension scheme. The latter is particularly important in a country where one in two older men and one in three older women leave the labour force on the grounds of a disability. On the other hand, a number of changes in active labour market policy and employment regulations are required to enhance the employability of older workers. Among the policy recommendations put forward in the OECD report are the following:
To obtain a copy of the report, journalists should contact the OECD Media Relations Division (tel. 33 1 45 24 97 00). For further comment or information, journalists are invited to contact the report’s author Christopher Prinz (33 1 45 24 94 83) or the Head of the OECD’s Thematic Review of Ageing and Employment Policies, Mark Keese (33 1 45 24 87 94).