How will disabled workers respond to a higher retirement age?

“People over 60 with an occupational disability hardly use their remaining work capacity”

A higher retirement age has a positive effect on the labor participation of older people, but probably also leads to more disability and unemployment benefit claims. This study shows that older employees who are partially disabled for work are more likely to face a full benefit situation due to the increase in the retirement age. Financial incentives to continue working have less effect for them compared to younger partially disabled employees. Older people with disabilities are also less likely to return to work than young people. A higher degree of incapacity for work leads to more loss of income for them.

 

Key Takeaways for the Industry

  • Policy should be aimed at making work more attractive and social security programs (financially) less attractive.
  • More flexible pension schemes with options for part-time retirement can play an important role in this.
  • On the demand side, consider measures that make it more attractive for employers to employ older workers with disabilities.

Netspar, Network for Studies on Pensions, Aging and Retirement, is a thinktank and knowledge network. Netspar is dedicated to promoting a wider understanding of the economic and social implications of pensions, aging and retirement in the Netherlands and Europe.

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