5 - Job Insecurity and Its Consequences for Older Workers

Summary

Introduction

With regard to their employment and concepts of employment insecurity, older workers make up a particular group on the labour market. According to established concepts in life-course theory (for example, Kohli, 1985; Mayer and Schoepflin, 1989), these workers are in the final phase of their employment career and will, after completing this phase, enter into a terminal state (in work terms) of retirement. Unlike younger workers, older employees thus have an alternative and socially accepted state as pensioners to which they can transit. This potential ‘alternative role’ as pensioners receiving public and/or private retirement benefits may reduce their readiness to accept insecure forms of employment as temporary solutions and instead opt for transiting into the ‘safe harbour’ of retirement. This may be even the more the case, given that today's older workers often can draw back to high levels of employment protection and legally established seniority rights which cannot be easily dismantled (Blossfeld, Buchholz and Hofacker, 2006). At the same time, in many European welfare states, pension benefits received during retirement are often substantially based on previous earnings from income. Metaphorically speaking, pension benefits thus can be regarded as the ‘balance sheet’ of the previous career, implying that those with higher pension contributions will also receive higher pension pay-outs. Vice versa, those with lower contributions – originating for example from lower earnings and interrupted or fragmented careers – will receive lower benefits. Particularly if these benefits are not sufficient to guarantee a decent standard of living in old age, these employees are thus dependent on additional earnings; they thus (need to) remain longer on the labour market, even if this implies accepting unfavourable and insecure types of jobs.

Throughout recent decades, older workers’ employment has undergone major transformations. From the oil crises in the 1970s up to the mid-1990s, many European countries actually followed a strategy of promoting ‘early exit’ of older workers to buffer the negative implications of globalization and the persistent labour market effects of the oil crises (Blossfeld, Buchholz and Hofacker, 2006; Ebbinghaus, 2006; Hofacker, 2010).