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This report summarizes the findings from a study conducted to identify the lessons learned from past experiences with programs for assisting displaced older workers; those people aged 45 to 64 who have lost a job for any number of reasons. In looking at displaced older workers, it was decided that the report should also attempt to shed light on what is the current status of older workers and what will be their role in any future economy. As such, it is hoped that future policy and programming designed to meet the needs of displaced older workers, may be developed in a more informed environment taking into consideration the role of older workers in years to come. 

The number of older individuals relative to the population as a whole has been growing at a steady pace over the past 20 years in many industrialized countries. For example, in Canada, in 1976, the population share of individuals aged 45 and older was 26.6%, while by 1996, this proportion had risen to 32.5%. According to Statistics Canada, the proportion is expected to increase further. Similar demographic trends have been observed in other OECD countries.




Coinciding with this aging trend in the population has been large-scale economic and industrial restructuring in the economies of these countries. Technological advances, trade liberalization, and efforts to meet shifting consumer demand patterns have often required fundamental adjustments. While those economic adjustments are generally viewed as necessary and beneficial in the long term, they often result in business closures and displacement of workers in the short to medium term.

These circumstances have served to generate a number of labour market problems for labour forces in general, and in particular for older workers. While workers displaced by structural change tend to experience greater 
re-employment barriers than those unemployed for other reasons, the problems associated with reintegration into the workforce have historically been even more profound among older individuals.

The literature indicates that older workers face a number of systemic barriers to obtaining employment and training, barriers that younger individuals may not face (Betcherman, Leckie and McMullin, 1997; CLMPC, 1990; Dunn, 1985; Morrison, 1996; Tindale, 1991). These barriers include: 

• life-long skills no longer in demand, and the lack of relevant skills for positions in growth industries and sectors of the economy; 
  
• lower levels of literacy and formal educational attainment; 
  
• a lack of experience and skills in job searching;
  
• personal issues related to self-esteem;
  
• less willingness to be geographically and/or occupationally mobile for an employment opportunity, for reasons of cost and risk; 
  
• negative stereotyping by employers, the media, and private as well as public employment agencies about the productivity of older workers, resulting in employer reluctance to hire or (re)train older workers; 
  
• social, managerial and political pressures on older workers to step aside to help address youth unemployment, reduce payroll costs and downsize organizations; and,
  
• job-related training programs which are often inaccessible and/or inappropriate to the needs and interests of older workers.
  

Canadian statistics indicate that among older displaced workers, the financial repercussions are progressively worse, the older the workers are when they are laid off. Exhibit #2 looks at a seven-year period after the lay-off (excluding the first post-lay-off year), where the average annual earnings from employment after lay-off was $11-12K among those laid off in the 45-49 year old age group, $8-9K among those in the 50-54 year old group, $3-4K for the 55-59 year old group, and $.5-2K for those 60-64 years old. These lower earnings are compounded by the fact that, among laid-off older workers as a group, the oldest workers generally had the highest employment incomes prior to being laid off, so the drops in income tended to be much greater (and presumably much more devastating financially and otherwise).²

Historically, there have been very few government programs in place for assisting displaced older workers. This is because older individuals have enjoyed more stable work histories at relatively higher wages than younger workers. They have also demonstrated consistently lower rates of unemployment and longer job tenure than younger workers. Consequently, there has not until recently been a pressing need to implement programs specifically targeted at assisting displaced older workers. Those who have had a need have generally been referred to general employment assistance programs, not targeted specifically towards older workers.

As the literature indicates, however, the traditional labour market advantages possessed by older workers are beginning to subside. Labour market trends suggest that the gaps in unemployment rates, job security, and job tenure among older workers relative to other age groups have been closing over the past twenty years. In addition, the labour force participation share of older workers has not progressed at the same pace as their population share. For older workers, and for economies as a whole, there is now a clear need to address the problems of older displaced workers; both from the perspective of addressing this group’s current needs, and more importantly, in the long run, from the perspective of where older workers in general will “fit” in the economies of the future. By highlighting, in a lessons learned format, what we know about the subject of older workers, future programs and policies may be developed in a more informed environment.

Approach

The reports on which this summary report is based brought together the results of evaluations, assessments, and/or reviews of older worker adjustment programs in Canada, the United States, and selected OECD countries (Australia, France, Germany, Japan, the Netherlands, Sweden, and the United Kingdom). The summary report then synthesized the information contained in this literature, with a view to both assess the impacts of these programs, and to delineate a series of lessons learned based on these experiences. 

In assessing what kinds of programs work, and which ones do not, the objectives of the specific programs and the broader government policy context must be taken into account. For example, some programs are intended to compensate workers who have been laid off, while others focus on the re-entry of laid-off workers into the labour force. Some programs seek to assist workers who are still employed in declining or restructuring industries to remain employed through training, job-sharing and work-time reduction, and other measures. At the broadest level, some programs seek to revitalize economic activity in specific communities or regions with a view to creating employment opportunities for displaced workers or workers whose livelihoods are in jeopardy.

Furthermore, it is possible that the range of programs available in a country may reflect an overarching goal, such as discouraging the re-integration of laid-off older workers into the workforce. The rationale is to enable young people to move into the labour force by providing extensive long-term income support for older workers, easier access to full pensions, or easier access to disability insurance. In this sense, retirement may be the desired outcome of labour force adjustment programs. Such a generalization would be a fitting description of the situation found in France.

In contrast, other countries may aim for full employment as their overarching goal. With this in mind, any policy or program to assist displaced older workers will be developed in such a way as to try and keep older workers as part of the active labour force. This is much closer to the situation one finds in Sweden.

Finally, there may be social policy objectives that influence, at least in part, the way programs are designed, including employment equity considerations, the desire to reduce reliance on income assistance and other government transfers and support services, concern about the quality of life of laid-off workers (self-esteem, confidence in work-related abilities, perceptions of their contribution to society, health, and general life satisfaction), and objectives related to the health and vigour of individual communities.

In light of all the extenuating circumstances that are at play when it comes to any labour market adjustment program or policy, the evaluations reviewed for this paper vary greatly in their focus, while reflecting a wide range of programs. In addition, the countries in which the programs were implemented vary greatly in economic circumstances, social and economic policy approaches, and political realities. Thus, it has often been difficult to draw clear comparisons among the findings about the programs, or to draw from the evaluations a set of generalized conclusions about what works and what does not. Nevertheless, in the following sections an attempt has been made to summarize the findings that do appear to be broadly relevant, and to raise for discussion some key issues that emerge from the evaluations.

Footnotes

1

In this report, older workers have been defined as those individuals over 45 (Aitken, 1995; Marshall, 1995; Saunders, 1984, Statistics Canada, 1998; and Trueman, 1989). However, within this group a distinction is sometimes made between those aged 45-54 and those aged 55-64. While we provide findings according to these two groups when available, a problem arises when different definitions of older workers are used. Unfortunately, few evaluations present findings grouped by age even when the 45+ definition is used.

2

When severance payments and income from government and company pensions are taken into account, the differences in overall income among the categories of older workers is less striking. While the earnings loss ranged from $12K in the 45-49 age group to $27K in the 60-64 age group, the loss in total income ranged from $9K to $12K respectively.