Employability of Older Workers in Italy and Europe

in W. Herremans, N. Heuvel, C. Ehrel (eds.), "Active ageing: early retirement and employabilty", Steunpunt WAV – Resource Centre for Labour Market Research, Belgium, 2006

In many European countries the participation rates of older workers are worryingly low, and Italy – within this picture – has one of the worst records, particularly for females. In this paper we investigate whether this signals an issue about their employability. Indeed, the non-participation of an individual does not point to an employability issue as long as it is a free choice of the person, and as long as it does not hinder their future participation in the labour market._x000d_ _x000d_ To address this point we single out which are the empirically most relevant factors in shaping cross country differentials. Two selection processes emerged as having a most prominent role: the life cycle decision for women of not participating to the labour market, and the access for men and women to early retirement schemes. Controlling for these selection processes international differences reduce significantly._x000d_ _x000d_ In both cases the main issue is the possibility that a participation choice made in a given point in time – for instance the early retirement decision – can have long lasting consequences, hindering future transition possibilities of the individuals. The magnitude of the two selection processes suggests already some policy conclusions, which are derived in the paper, and points to the need of further research to ascertain whether there are barriers to late entries and re-entries in the labour market._x000d_ _x000d_ _x000d_ _x000d_ Keywords: Employability; Ageing; Participation rate._x000d_ _x000d_ JEL codes: J14; J21.

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