Are extended unemployment benefits harmful to older workers? (PDF)

Essay aus dem Jahr 2021 im Fachbereich VWL - Arbeitsmarktökonomik, Note: 2,0, Universität zu Köln, Sprache: Deutsch, Abstract: Retirement from the labour market takes place regularly on the basis of the statutory retirement age or on the basis of early retirement schemes. In addition, unemployment combined with low chances of continued employment in the labour market can lead older workers to take advantage of state social benefits or early retirement programmes. In the recent past, these programmes have been seen in many EU countries as an exit route from the labour market for older workers - usually from the age of 55 onwards - and as a soft entry route towards regular retirement. This was politically desired and promoted, for example, to create jobs for younger workers. If older workers leave the labour market prematurely and receive state social benefits over a longer period of time - e.g. in the form of unemployment benefits or extended unemployment benefits - this is associated with negative effects. According to the prevailing scientific opinion, extended unemployment benefits promote the duration of unemployment as well as the duration until a new job is taken up. Moreover, the higher the unemployment benefit, the greater the probability that the individual will decide against a job offer on the labour market. Another spectrum of negative effects of early retirement programmes or extended unemployment benefits includes, especially for men, health consequences and a higher risk of mortality. The aim of this paper is to discuss the results of empirical studies focusing on the negative effects of early retirement programmes and to answer the research question: "Are extended unemployment benefits harmful to older workers? ". For the sake of completeness, empirical studies are also presented that prove positive effects of early retirement programmes.

The course of the work begins with the definition of the term "older workers". The second chapter looks at the reasons that justify retirement from employment. In this context, the effect of unemployment benefits and extended unemployment benefits as incentive effects is discussed. The third chapter then focuses on the long-term effects of extended unemployment benefits and early retirement, with the emphasis on negative aspects. Empirical studies on this topic form the basis for this. To complete the picture, empirical studies are discussed that demonstrate positive effects of extended unemployment benefits or early retirement programmes. In the last chapter, the thesis ends with a conclusion and an outlook.