Further Training for Older Workers: A Solution for an Ageing Labour Force?
Table Of Contents
- About the author(s)/editor(s)
- About the book
- This eBook can be cited
- 1 Introduction
- 2 An Ageing German Society: Implications and Developments
- 2.1 A New Demographic Era
- 2.2 Developments in the Structure and Function of the German Labour Market
- 2.2.1 The Shrinking and Ageing Labour Force
- 2.2.2 The Advance in Technology
- 2.2.3 From Industrial to Service Economy
- 2.3 The Determinants of Employment of Older Workers
- 2.3.1 “Push” vs. “Pull” Factors: The Decision to Retire
- 2.3.2 Going Back to Work: Difficulties and Obstacles
- 2.4 Overcoming Pension Costs: Developments in Policy
- 2.4.1 Reforms in the German Pension System
- 2.4.2 Reduced Opportunities for Pre-Retirement Pathways
- 2.4.3 Developments in Employment Policies for Older Workers
- 2.5 The Employment Situation of Older Workers in Germany
- 2.5.1 Increased Labour Force Participation: Reversed Trend of Early Retirement
- 2.5.2 Improvements of Unemployment Rates
- 2.6 Summary
- 3 Investments in the Training of an Ageing Labour Force
- 3.1 Human Capital Investment: Theory and Concepts
- 3.1.1 The Human Capital Theory: The Concept of Training
- 3.1.2 The Investment Decision: Older Workers in View of the Theory
- 3.2 The Incidence of Training
- 3.2.1 The Determinants of Training: A General Overview
- 3.2.2 Training Participation: The Case of Older Workers
- 3.2.3 The “Time-Left” Indicator: The Longer the Employment, the Higher the Training?
- 3.3 The Enhancement of Employability through Training
- 3.3.1 The Modern Concept of ‘Employability’
- 3.3.2 Training and the Employment Prospects of Older Workers
- 3.4 Summary
- 4 The Job Satisfaction of Older Workers
- 4.1 Job Satisfaction and Labour Market Behaviour
- 4.2 Job Satisfaction: Theory and Evidence
- 4.2.1 The Determinants of Job Satisfaction
- 4.2.2 Variation in Job Satisfaction between Groups of Workers
- 4.3 The Relation between Training and Job Satisfaction
- 4.4 Summary
- 5 The Methodological Approach
- 5.1 Country Selection: The Case of Germany
- 5.2 The Data Source and Sample Size
- 5.3 Operationalization of Key Variables
- 5.3.1 The Dependent Variables Training and Job Satisfaction
- 5.3.2 The Independent and Control Variables
- 5.4 The Method of Analysis: Regression Models for Binary Outcomes
- 5.5 Univariate Description
- 6 Human Capital Investments in a Shrinking Labour Force: How Do Older Workers Fit in?
- 6.1 Changing Structure of the German Labour Force over Time: An Analysis based on the SOEP Dataset
- 6.1.1 Improvement in the Labour Force Participation of Older Workers
- 6.1.2 Developments in the Characteristics of Older Workers
- 18.104.22.168 Gender Developments: Older Women Strike the German Labour Force
- 22.214.171.124 Changing Distribution of Older Workers with Different Educational Level
- 126.96.36.199 Blue vs. White Collars: Variations in the Share of Older Workers from Different Occupational Groups
- 6.2 Human Capital Investments in Older Workers: Bivariate Analysis
- 6.2.1 The Incidence of Training: A General Overview
- 6.2.2 The Training Incidence of Older Workers
- 6.3 Developments in the Likelihood of Older Workers to Participate in Professional Training Courses over Time: Multivariate Analysis
- 6.4 Summary
- 7 Job Satisfaction of Older Workers: Does Participation in Professional Training Courses Make a Difference?
- 7.1 The Job-Satisfaction of Workers in Germany based on the SOEP
- 7.2 Training – A New Determinant of Job Satisfaction?
- 7.2.1 Older vs. Younger Workers: Variations in the Effect of Training on Job Satisfaction
- 7.2.2 Occupation-based Differentiation
- 7.3 The Likelihood of Job Satisfaction of Older Workers: Multivariate Analysis
- 7.4 The Training Frequency Model: Deciphering the Relation between Training and Job Satisfaction among Older Workers
- 7.5 Summary
- 8 Summary and Discussion: Further Training for Older Workers – A Solution for an Ageing Labour Force?
- 8.1 The Training Participation of Older German Workers
- 8.2 The Job Satisfaction of Older Workers and its Relation to Training
- 8.3 The Implications and Limitations of the Current Study
- 8.4 Future Policy Aspects
- List of Figures
- List of Tables
- List of Abbreviations
Older workers nowadays are needed to stay for longer periods in the labour force (OECD, 2005a). While this necessity should eventually lead to a better economic growth, it requires overcoming a series of macro and micro level challenges. In the macro level, institutional and policy changes in Germany involve altering patterns of retirement and encouraging late employment. This is quite challenging for a country which until recently was one of the leading countries to encourage the early retirement of its older labour force (OECD, 2005a). In the last decade, Germany has experienced a meaningful decrease in the share of older workers who retired early, mainly due to reduced options for early retirement (Dietz & Walwei, 2011). Nevertheless, opportunities for early retirement still exist which means that further promotion of policies is needed (OECD, 2012a).
Coping with the challenges in the micro level, however, seems more complicated. It involves changing the attitudes of both employers and older employees towards the extension of employment period. Employers play an enormous role in the execution of recent policies. Since they need to hire, retain and train older workers in order to support continued economic growth (Piktialis & Morgan, 2003), their prejudiced attitudes towards older workers need to change. In this regard, a special concern is given to the skill level of older workers, which needs to be constantly maintained by further training. While the reluctance of employers to train older workers is one of the main causes for their low training incidence (Boockmann & Zwick, 2004; Lazazzara et al. 2011) changing their attitudes will determine the extent of training which older workers will participate in.
The extension of employment period might not be easily accepted by older workers and some would probably wish to retire early. While early retirement is often associated with low job satisfaction (Hanisch & Hulin, 1991; Schulte, 2005) the requirement of longer employment may therefore raise the rate of older workers with low job-satisfaction. This may pose a challenge for policy makers. Considering studies pointing to a strong association between job satisfaction and labour market behavior (Clark et al. 1996 Gazioglu & Tansel, 2002; Schulte, 2005), it is also essential to identify the means by which job satisfaction of these workers can be improved. In this regard, a multiple perspective, according to which the contribution of older workers to the labour force depends on both their skill level and job satisfaction, is needed. Accordingly, the following research deals with two major questions: First, do we recognize an increase in ← 9 | 10 → the training participation of older workers over the years? And second, is the overall job satisfaction of older workers affected by participation in training, and in particular, by an occupational-based manner?
The literature regarding the relationship between training and older workers so far has mostly emphasized the low training incidence of older workers compared to younger ones (Taylor & Urwin, 2001; Warwick Report, 2006; Schmidt, 2007; Schleife, 2008; Tippelt et al. 2009; D’Addio et al. 2010; Maximiano, 2011). This however might be changing as the participation of older workers in the labour force has increased in the last decade (OECD, 2012b). In this regard, a trend analysis as provided by this research, which examines the developments in the training incidence of older workers in the last decade, is essential. Furthermore, the predicted rise in the heterogeneity of older workers in the German labour force due to changing patterns of retirement is a novel topic, which is discussed and examined in this research. Using trend analyses, three additional sub-questions are examined in order to identify developments in the patterns of training participation among under-represented groups of older workers (e.g. women, low-skilled and blue-collars). Moreover, the analysis of the relationship between participation in training and job satisfaction ← 10 | 11 → of older workers is also driven by the predicted rise in the heterogeneity of the ageing labour force. In this regard, changes in the labour force participation of older workers from different occupational groups due mainly to the reduction of early retirement pathways may significantly alter the average overall job satisfaction of the ageing labour force. Following that assumption, the relation between training and job satisfaction of older workers is examined while differentiating between occupational groups. The analyses are carried out using multivariate methods based on the German SOEP dataset.
Building upon the well-known perspective of the human capital theory, in which older workers are the least likely to participate in training due to a short time-left in employment (Becker, 1993), returns to training of older workers nowadays should increase due to a longer pay-back period (OECD, 2011a; OECD, 2012). This provides incentives to invest in the training of older workers (Riphahn & Trübswetter, 2007; OECD, 2012). Studies of the recent years have already indicated to a positive trend in the training participation of older workers in Germany (Riphahn & Trübswetter, 2007). The current research joins this growing stream of studies by providing new evidences on recent developments in the training incidence of older workers, which may also hint at the success of policies to change patterns of training participation.
The uniqueness of this study lies in focusing on the topic of heterogeneity of the ageing labour force and its implications on both, training and job satisfaction of older workers. Since the early 1990s, institutional developments have been carried out in Germany in order to encourage the longer employment of older workers (OECD, 2005a). While the general employment rate of workers aged 55–64 has significantly increased in recent years (OECD, 2012b), it is assumed to be also reflected in the share of sub-groups of workers which are less representative in the labour force in older ages. In theory, extension of employment period should also lead to increased investments in the training of these groups. This is especially relevant as findings indicate a low level of skills among workers subjected to early retirement schemes (OECD, 2004b). Examining developments in the training incidence of these workers over the years, as it is done by this research, will contribute to identify new patterns of training participation among older workers.
Furthermore, from the point of view of this study, the job satisfaction of older workers is an important component of their labour force behaviour and should be taken seriously by policy makers and employers nowadays. This perspective is supported by studies indicating a positive effect of job satisfaction on workers’ productivity and employment probability (Appelbaum et al. 2005; Schulte, 2005). Since the level of job satisfaction in the context of an ageing labour force has not been the target for public debates in Germany so far, it may indicate that job satisfaction is not regarded as an important component, which the economic activity of older workers depends on. In this regard, this study aims to emphasize the importance of older workers’ job satisfaction in determining their labour market behavior. Furthermore, assuming a rise in the share of low job-satisfied older workers, such labour force may not provide the efficacy and dedication expected from it. According to the literature on job satisfaction, different job characteristics induce different attitudes among workers from different occupations towards their work, which eventual affects their level of job satisfaction (Ronen & Sadan, 1984). This suggests that a heterogeneous labour force may call for different approaches to deal with the problems emerging from a longer employment period, e.g. increased unsatisfied workers. Following this, the effect of training on the overall job satisfaction of different occupational groups is analysed. The inclusion of training as a determinant of job satisfaction of older workers is therefore one of the novel contributions of this research. Despite the growing share of studies in this field in the recent years, none of these studies concentrate on older workers. Yet, differentiating between the levels of job satisfaction of several occupational groups of older workers, as done by this study, corresponds to the literature on job satisfaction that stresses for an occupational-based differentiation in order to understand variations in job satisfaction (Ronen & Sadan, 1984). ← 11 | 12 →
The rest of this work is organized as follows: Chapter 2 provides the basic arguments for the rise in importance of further training for older workers. In this regard, recent developments in demography as well as in the structure and function of the German labour market are described. These developments have led to the problem of labour force shortage in most western countries, which eventually led to the promotion of employment extension among older workers. The chapter provides a thorough investigation of institutional and policy changes in Germany taken place in the last decade and aimed to alter patterns of employment and labour force participation of older workers. These developments also set the theoretical base for constructing the research hypotheses concerning the relation between training and older workers, and the extent of which training determines the job satisfaction of older workers.
Chapter 3 provides the theoretical background for investigating the relationship between older workers and training participation. Following a discussion on the leading theory behind investments in human capital, two opposite approaches with respect to the training of older workers are presented, an old and a new one. Guided by the human capital theory, the old approach reflects the well-known weak situation of older workers in training. This is contrasted with a new stream of studies, indicating a change in the relation between training and older workers due to the new labour force situation of older workers. Both approaches are used later for analysing the developments in the training of older workers. Furthermore, in order to understand the contribution of training for older workers, the chapter outlines an in-depth theoretical investigation to study the necessity of employability and its relation to training of older workers.
Chapter 4 discusses the literature regarding the relationship between training and job satisfaction of older workers. The contribution of job satisfaction in shaping the labour market behaviour of workers constitutes a main argument for conducting a research on job satisfaction. In this regard, two “outcomes” of job satisfaction, which are relevant for this research, are discussed: Productivity and employment probability. Furthermore, in order to understand the factors influencing workers’ job satisfaction, an account is given to the main determinants of job satisfaction. Related literature on older workers’ needs and preferences is also collected, which could assist to analyse the relation between participation in training and job satisfaction. This follows an investigation of the literature on the needs of different occupational groups of workers. Despite a lack of studies on older workers in particular, this may assist to understand the relation between training and the job satisfaction of different occupational groups. Finally, the literature on the relationship between training and job satisfaction is discussed. ← 12 | 13 →
Chapter 5 describes the methodological approach and methods used for analysing the two research questions. Based on data from the German Socio-Economic Panel (SOEP), the first research question is investigated using a cross-sectional analysis followed by a trend analysis over the years 2000, 2004 and 2008 in order to explore developments in the training incidence of older workers. This is done by applying a logistic regression model in each year. The second research question involves a pooled cross-sectional analysis followed by a longitudinal analysis in order to investigate the relation between training and job satisfaction. The first analysis is conducted by estimating a logistic regression model, and the second by estimating a random-effects logistic regression model.
Chapter 6 investigates developments in the training participation of older workers over the years 2000, 2004 and 2008. An account is first given to developments in the age structure of the sample over the years measured. This follows a deeper examination of the development in the characteristics of older workers over the years which contributes to reveal part of the dynamics behind changes in the labour force participation of older workers. The chapter follows a thorough descriptive investigation of the participation of older workers in professional training courses. The training incidence of sub-groups of older workers is also examined and sheds light on recent developments in older workers training participation. Finally, a multivariate analysis is conducted via logistic regression with the aim to confirm the descriptive result.
Chapter 7 examines the relationship between participation in professional training courses and older workers’ job satisfaction. The overall job satisfaction of both, older and younger workers, is first examined and discussed, followed by a specific look at the level of job satisfaction of older workers from different occupational groups. This aims to reveal occupational-based variations in job satisfaction and thus to open a debate concerning the economic implications of increased heterogeneity of the ageing labour force. The relationship between training and overall job satisfaction of older workers is then studied, first, by comparison with younger workers, and second by an occupational-based differentiation. In this respect, the chapter shows how the overall job satisfaction of older workers in general and of different occupation groups in particular changes when training is considered. These findings are embedded in a theoretical model designed to decipher the training-job satisfaction relationship specific to older workers.
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- Publication date
- 2015 (November)
- job satisfaction German labour force maintaining skill levels German Socio-Economic Panel
- Frankfurt am Main, Berlin, Bern, Bruxelles, New York, Oxford, Wien, 2016. 267 pp., 35 tables, 17 graphs