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By Organisation for Economic Co-Operation a

ISBN-10: 9264012737

ISBN-13: 9789264012738

ISBN-10: 9264012745

ISBN-13: 9789264012745

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THE CHALLENGE AHEAD – 41 The extent to which the demographic burden will translate into an economic burden depends on a number of additional and often interrelated factors. These include labour force participation rates and the volume of labour in terms of hours worked, the substitutability of other production factors such as capital and technology for (declining) labour, and growth in labour and total factor productivity. A. Labour performed by fewer and older people The decline in the size of the working-age population could in fact be compensated by an increase in participation rates or, at constant participation rates, by an increase in individual employment duration in terms of weekly and annual hours worked.

These rates peaked at over 30% (compared to a peak of 11% in the Old Länder), with some decline in the subsequent years. This reflects the unfavourable labour market situation of older workers in the course of economic transition, as well as the widespread use of pre-retirement through the unemployment insurance system. As in many other OECD countries, there is a strong “education gap” in unemployment rates in Germany. 3). The relative labour market disadvantage of low-skilled workers declines with age: their (high) unemployment rates remain the same while those of medium- and high-skilled workers increase with age.

5 percentage points over the period 1995-2003. 6, Panel B) shows that the limited increase in participation rates of older German workers since 1995 is partly a consequence of the shift in age composition within this group (the same conclusion holds for the trend in employment rates). By 2003, the large birth cohort 1939-43 has reached age 60-64, thereby dampening any gains for the entire group of older workers. Among both workers aged 55-59 and those aged 60-64, participation and employment rates have in fact increased considerably even more than on average across the OECD.

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Ageing And Employment Policies Germany (Ageing and Employment Policies) by Organisation for Economic Co-Operation a

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