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Ageing and Employment Policies: Netherlands 2014

Working Better with Age

image of Ageing and Employment Policies: Netherlands 2014

Given the ageing challenges, there is an increasing pressure in OECD countries to further boost the employability of the working-age population over the coming decades. This report provides an overview of policy iniatives implemented over the past decade in the Netherlands and identifies areas where more should be done, covering both supply-side and demand-side aspects. To give better incentives to carry on working, the report recommends to promote longer contribution periods in the second-pillar pension schemes, and ensure better information and transparency of pension schemes, with a special focus on groups with low financial literacy. On the side of employers, it is important to progress towards more age-neutral hiring decisions and wage-setting procedures with more focus on performance and less on tenure and seniority. To improve the employability of older workers, the focus should be to promote training measures for older unemployed which are directly linked to a specific job. The large diversity in municipal "Work-First"programmes should be utilised in designing mor effective activation policies targetted on those at risk of losing contact with the labour market.

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Executive summary

Leaving the labour market through early retirement and disability schemes was previously commonplace for older workers in the Netherlands. Over the past decade, the authorities have taken steps to: increase the incentives to work; close pathways to early retirement; tackle overutilisation of disability pension; and raise the state pension age. Encouraging results have been achieved, but the Netherlands still remains well behind the best achievers. The recommendations that are put forward below, as possible elements of an overall strategy for promoting the employment and employability of older workers, are based on three mutually supportive actions: i) better incentives to carry on working; ii) tackling employment barriers on the side of employers; and iii) improving the employability of older workers.

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