The hiring and employment of older workers in Germany: a comparative perspective

Abstract

This paper focuses on the German labor market for older workers. It does so in comparison with other countries and with a unique focus on the role of employer incentives for retaining and hiring older workers. It argues that while employment of older German workers has improved due to changes in government policy, the labor market for older workers remains characterized by far less mobility and opportunity. While we recognize the potential explanations of reduced productivity and age discrimination, we review evidence pointing to the importance of life-cycle contracts (Hutchens, J Lab Econ, 4, 439–457, 1986; Lazear, J Polit Economy, 87, 1261–1284, 1979). These contracts can be efficient but typically imply that older workers will have difficulty being re-hired into career jobs after separation. We suggest that attempts to reduce or eliminate such life-cycle contracts are likely to be counter-productive but suggest how other countries, particularly Japan, have dealt with this issue.

Nonunion Employee Representation: Theory and the German Experience With Mandated Works Councils

“…Deferred incentive schemes structure earnings profiles by paying employees less than their marginal products early in their tenure and more than their marginal products late in their tenure (Lazear , ). However, if the wages of high‐tenured workers exceed their marginal products, employers have the incentive and potential opportunity to renege on the implicit agreements later by firing these employees (Heywood and Jirjahn ).…”

Employer Policy and Practice Toward Older Workers in Hong Kong: The Role of Shifting Intergenerational Dynamics

“…As previously detailed in this paper, research in Hong Kong highlights that older workers face a range of employer policy and practice related barriers to their labor market participationmirroring international trends ( [AUTHOR]; Heywood & Jirjahn, 2016;Taylor & McLoughlin, 2015). While this research has drawn attention to workplace age discrimination and negative stereotypes about the abilities of older workers, it has not explicitly articulated or explored broader aging dynamics.…”

Problems of Older Workers on the Labour Market

“…Such delayed-compensation contracts could both encourage employees' lifetime work effort (or productivity) and discourage the worker from shirking. It might also lower firms' need to train new workers, rise junior workers' loyalty or alleviate monitoring problems (Van Ours and Stoeldraijer, 2011;Siebert, 2009 or Skirbekk, 2003;Heywood and Jirjahn, 2016).…”

“…On the other side, Heywood and Jirjahn (2016) suggest that age diversity can lead to more conflicts and communication difficulties within teams. (Average age of workers within a team isn't associated significantly with production errors but higher age diversity of team members is associated with increase in errors).…”