The ageing population in Denmark, as in most other western countries, involves an increase in public expenditure and the risk of labour shortages. One way to meet these challenges is to retain older workers in the labour market.
In Denmark, politicians and others are currently discussing whether a very popular early retirement programme, VERP, should be eliminated. For a short description of the programme, see box 1. However, before the onset of this discussion, the National Labour Market Authority in Denmark commissioned the Danish National Centre for Social Research to examine salaried work after the age of 60. The project builds on responses from a new survey collected in the autumn of 2010 by SFI-survey by means of telephone interviews. More than 5,000 responded the survey, corresponding to a response rate of 77%. The respondents were 55-70 years old and were selected from seven different groups, namely unemployed 55-59 year-olds, employed 55-59, 60-64 and 65-70 year-olds, employed and non-employed VERP recipients, and employed old-age pensioners.
We are examining a number of topics in the project. First, we consider the extent to which 60-70 year-olds are working and then we characterise these workers and their jobs. Among others things we look at the gender, educational level and health status of these workers and we examine the number of hours they work, their earnings and whether their jobs are physically demanding.
Second, we examine how long older workers plan to keep on working. To answer this question, we e.g. asked respondents aged 55-64 whether they plan to continue working after reaching the age 65. In order to identify the determinants of these plans, we asked the respondents about a large number of individual and job characteristics such as cohabitation status, health status, educational level, satisfaction with different job dimensions, job demands and job control.
Box 1: Old-age pension and a popular early retirement programme in Denmark
Currently the state pension is available in Denmark from the age of 65. However, it is possible to work to some extent while receiving the state pension. Furthermore, it is possible to postpone the pension to a higher age. Utilizing this option results in a higher amount of pension benefits. In addition, a large number of 60-64 year-olds has access to an early retirement scheme called the Voluntary Early Retirement Programme (VERP, “efterløn” in Danish) from the age of 60. It is possible to work while receiving VERP benefits, but the benefits are reduced corresponding to the number of hours worked. If 30 or more hours are worked in a week, no benefits are received for that particular week.
Third, we consider the extent to which older workers have an agreement with their employer about how long they can stay at the workplace. Furthermore, we examine whether such an agreement increases the probability that older workers will plan to keep on working compared with individuals without such agreements.
Fourth, we look at the extent to which older workers are familiar with the possibilities in the existing Danish legislation regarding work after the age of 60, see also box 1. Results from this project will be published in May 2011.