Organizations, managers, and the employment of older workers after retirement

Abstract

Population aging and the resulting retirement-related policy reforms are leading to higher rates of labor market participation among older workers and later retirement ages. In addition, working beyond traditional retirement ages, thereby combining employment with retirement, is also increasingly common. This dissertation assesses the employers’ perspective on the employment of older workers, in particular in the period after some form of formal retirement, which is an important topic that has only received sparse attention in the social scientific literature. Two main types of research questions were raised in this thesis. First, to address questions pertaining to organizational practices regarding the employment of older workers after retirement, data from a large-scale survey among employers from the Netherlands and several other European countries were used. The results showed a lot of variation in the different ways that organizations deal with the employment of older workers after retirement. While some organizations treat them like regular employees, others use retirees solely for irregular work. There are also many organizations that do not employ older workers after retirement. These are mostly smaller organizations that do not tailor their human resource policies to accommodate older workers. Furthermore, the results show that age-related workplace norms of top managers (such as owners or CEOs) affect their organizations’ practices. More specifically, organizations with top managers that support age equality are more likely to focus on employment of older workers before retirement. Organizations with top managers that support later retirement ages are more likely to have practices that facilitate the employment of older workers after retirement. Second, to address questions pertaining to the individual decision-making of managers regarding the employment of older workers, data from several vignette experiments among real-life managers were used. Here, the results show that managers are overall quite unlikely to offer employment opportunities to older workers, although the characteristics of the older worker being assessed significantly affect managers’ decisions. Individual characteristics of older workers or older job applicants that signal more human capital, such as better qualifications, better health, and a larger social network, are most strongly related to managers offering employment opportunities. In the particular situation that older workers face mandatory retirement but want to continue working, their willingness to accept a lower wage may entice managers to rehire them. However, even with very favorable characteristics, contextual factors, such as a manager that does not support late retirement or bad general economic conditions, may restrict employment opportunities for older workers after retirement. In the future, the number of older workers that will be looking for employment until and beyond traditional retirement ages is expected to increase strongly, due to continued population aging and the decreasing generosity of pension systems. However, to accommodate all those older workers, employers will need to become more accustomed to employing older workers and opening up opportunities for paid employment after traditional retirement ages. Improving cultural age-related workplace norms, especially those related to age equality and retirement timing, seems conducive to better employment opportunities for older workers.