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The Effect of Early Retirement Incentives on the Training Participation of Older Workers

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  • Didier Fouarge
  • Trudie Schils

Abstract

Human capital theory predicts that older workers are less likely to participate in on‐the‐job training than younger workers, due to lower net returns on such investments. Early retirement institutions are likely to affect these returns. Using the European Community Household Panel we show that older workers participate less in training, and that early retirement institutions do indeed matter. Generous early retirement schemes discourage older workers from taking part in training, whereas flexible early retirement schemes encourage this. Finally, the results suggest that in most European countries training can keep older workers longer in the labour market.

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  • Didier Fouarge & Trudie Schils, 2009. "The Effect of Early Retirement Incentives on the Training Participation of Older Workers," LABOUR, CEIS, vol. 23(s1), pages 85-109, March.
  • Handle: RePEc:bla:labour:v:23:y:2009:i:s1:p:85-109
    DOI: 10.1111/j.1467-9914.2008.00441.x
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    File URL: https://doi.org/10.1111/j.1467-9914.2008.00441.x
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    Cited by:

    1. Peter B. Berg & Mary K. Hamman & Matthew M. Piszczek & Christopher J. Ruhm, 2015. "The Relationship between Establishment Training and the Retention of Older Workers: Evidence from Germany," NBER Working Papers 21746, National Bureau of Economic Research, Inc.
    2. Anders Stenberg & Xavier Luna & Olle Westerlund, 2012. "Can adult education delay retirement from the labour market?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(2), pages 677-696, January.
    3. Uschi Backes-Gellner & Martin R. Schneider, 2011. "Economic Crises and the Elderly," Working Papers 0142, University of Zurich, Institute for Strategy and Business Economics (ISU).
    4. Aistov, Andrey & Aleksandrova, Ekaterina, 2014. "Individual returns to training: Evidence from Russian firm," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 34(2), pages 56-79.
    5. Jos Sanders & Luc Dorenbosch & Rob Gründemann & Roland Blonk, 2011. "Sustaining the Work Ability and Work Motivation of Lower-educated Older Workers: Directions for Work Redesign," management revue - Socio-Economic Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 22(2), pages 132-150.
    6. Montizaan, R.M. & de Grip, A. & Fouarge, D., 2015. "Training access, reciprocity, and expected retirement age," Research Memorandum 005, Maastricht University, Graduate School of Business and Economics (GSBE).
    7. Kerndler, Martin, 2016. "Contracting frictions and inefficient layoffs of older workers," VfS Annual Conference 2016 (Augsburg): Demographic Change 145711, Verein für Socialpolitik / German Economic Association.
    8. Montizaan, Raymond & Cörvers, Frank & De Grip, Andries, 2010. "The effects of pension rights and retirement age on training participation: Evidence from a natural experiment," Labour Economics, Elsevier, vol. 17(1), pages 240-247, January.
    9. Ann Barbara Bauer & Reiner Eichenberger, 2018. "Worsening Workers' Health by Lowering Retirement Age: The Malign Consequences of a Benign Reform," CREMA Working Paper Series 2018-02, Center for Research in Economics, Management and the Arts (CREMA).
    10. Andrea Cegolon, 2015. "Determinants and Learning Effects of Adult Education-Training: a Cross-National Comparison Using PIAAC Data," DoQSS Working Papers 15-11, Quantitative Social Science - UCL Social Research Institute, University College London.
    11. Elisabetta Magnani, 2016. "Dissatisfaction with Working Time and Workers' Training Opportunities. Evidence from Matched Employer–Employee Data," Economic Papers, The Economic Society of Australia, vol. 35(2), pages 112-129, June.
    12. Ann Barbara Bauer & Reiner Eichenberger, 2017. "Endogenous aging: How statutory retirement age drives human and social capital," CREMA Working Paper Series 2017-02, Center for Research in Economics, Management and the Arts (CREMA).
    13. Wolfgang Frimmel, 2020. "Later Retirement and the Labor Market Re-Integration of Elderly Unemployed Workers?," Economics working papers 2020-24, Department of Economics, Johannes Kepler University Linz, Austria.
    14. Maciej Lis & Agnieszka Kamińska & Aart-Jan Riekhoff & Izabela Styczynska, 2013. "The Impact of Institutional and Socio-Ecological Drivers on Activity at Older Ages," CASE Network Reports 0115, CASE-Center for Social and Economic Research.
    15. Christian Keuschnigg, 2016. "Aging, Taxes and Pensions in Switzerland," CESifo Working Paper Series 5714, CESifo.
    16. Lössbroek, Jelle & Radl, Jonas, 2019. "Teaching older workers new tricks: workplace practices and gender training differences in nine European countries," EconStor Open Access Articles, ZBW - Leibniz Information Centre for Economics, pages 2170-2193.
    17. Christian Pfeifer & Simon Janssen & Philip Yang & Uschi Backes-Gellner, 2010. "Training Participation of an Aging Workforce in an Internal Labor Market," Working Paper Series in Economics 170, University of Lüneburg, Institute of Economics.
    18. Brunello, Giorgio & Comi, Simona, 2015. "The side effect of pension reforms on the training of older workers. Evidence from Italy," The Journal of the Economics of Ageing, Elsevier, vol. 6(C), pages 113-122.
    19. Anders Stenberg & Olle Westerlund, 2013. "Education and retirement: does University education at mid-age extend working life?," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-22, December.
    20. Christian Keuschnigg & Mirela Keuschnigg & Christian Jaag, 2011. "Aging and the Financing of Social Security in Switzerland," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 147(II), pages 181-231, June.
    21. Christian Keuschnigg, 2016. "Aging, Taxes and Pensions in Switzerland," CESifo Working Paper Series 5714, CESifo.

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