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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. Copyright 2009 CEIS, Fondazione Giacomo Brodolini and Blackwell Publishing Ltd..

Suggested Citation

  • 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
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    Cited by:

    1. Aistov, Andrey & Aleksandrova, Ekaterina, 2014. "Individual returns to training: Evidence from Russian firm," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 34(2), pages 56-79.
    2. Montizaan R.M. & Grip A. de & Fouarge D., 2015. "Training access, reciprocity, and expected retirement age," Research Memorandum 005, Maastricht University, Graduate School of Business and Economics (GSBE).
    3. Berg, Peter B. & Hamman, Mary K. & Piszczek, Matthew & Ruhm, Christopher J., 2015. "The Relationship Between Establishment Training and the Retention of Older Workers: Evidence from Germany," IZA Discussion Papers 9508, Institute for the Study of Labor (IZA).
    4. 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.
    5. 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.
    6. 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).
    7. 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.
    8. 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.
    9. Christian Keuschnigg, 2016. "Aging, Taxes and Pensions in Switzerland," CESifo Working Paper Series 5714, CESifo Group Munich.
    10. 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.
    11. 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).
    12. Kerndler, Martin, 2016. "Contracting frictions and inefficient layoffs of older workers," Annual Conference 2016 (Augsburg): Demographic Change 145711, Verein für Socialpolitik / German Economic Association.
    13. 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).
    14. Andrea Cegolon, 2015. "Determinants and Learning Effects of Adult Education-Training: a Cross-National Comparison Using PIAAC Data," DoQSS Working Papers 15-11, Department of Quantitative Social Science - UCL Institute of Education, University College London.
    15. 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.
    16. repec:eee:joecag:v:6:y:2015:i:c:p:113-122 is not listed on IDEAS
    17. 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.

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