France: Jobs and older workers

OECD Directorate for Employment, Labour and Social Affairs

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France’s labour market is a two-sided coin. On one side, it boasts one of the highest productivity rates per employed worker in the OECD, yet, on the other, there are whole sections of the adult population not in work. Apart from unemployment, which is stubbornly high, the employment of older people is now absorbing considerable public attention. Mobilising these people into the labour market would not only help strengthen French economic performance further, but reduce pressure on pensions and public finances.

Just 53% of over-50s in France are in employment. This is a low rate compared with other OECD countries whose average is 59%. The gap is particularly wide among less-skilled workers: in 2002, only 51% of unskilled men aged 50 to 64 in France had jobs, compared with 88% in Iceland, 80% in Switzerland and 78% in Japan.

In France, where life expectancy is one of the highest in the world, many “older” people not working are in fact relatively young! The effective retirement age has plummeted over the last 40 years: at the end of the 1960s it was as high as 67 for both sexes. But the average age at which workers exit the labour force was just 59.3 for men and 59.4 for women in the early 2000s, compared with 65.3 for men and 62.1 for women in Denmark, for example. The gap between the average effective retirement age and life expectancy at 65 is therefore widening, exerting pressure on public finances.

The French government has begun to respond. Since the mid-1990s, it has greatly restricted access to publiclyfunded early retirement schemes. And a decisive step to encourage workers to remain active longer was taken with the 2003 pension reform, which raised the contribution threshold for entitlement to a full pension. It also introduced a bonus for those ready to work beyond the standard retirement age. At the same time, for jobless people with 25 years in employment, the age of access to unemployment benefits until full pension entitlement was raised from 55 to 57 and a half. However, the fact that recipients were exempted from having to look for available work led to a sharp rise in the number of older jobless people and continued to give the impression that the labour market was as good as closed off to older workers. In fact, with early retirement options no longer available, unemployment with no job search obligation has become just another way to leave the labour market early.

This situation has to change and the requirement for newly unemployed people over the age of 55 to look for work should be re-established. Active placement measures based on innovative back-to-work strategies would be needed. For instance, public employment services staff at the new one-stop shop job centres, or maisons de l’emploi, should introduce support measures that reflect different situations, taking account of experience and local labour market conditions. One model worth looking at is the “New Deal 50 plus” scheme in the UK. There, qualified and well-motivated personal advisers have shown they can make a difference guiding older unemployed job seekers if they have more time to spend on personalised follow-up.

Changing employers’ attitudes to age is also important. Indeed, it seems paradoxical that they should value the experience that older workers offer, while still believing they would be better off by getting rid of them or refusing to hire them.

In a context of high unemployment, this makes it easier for employers to draw in a younger workforce. The trouble is, the workforce itself is ageing. The social partners must start to look at new policy options for human resource management if they are to cope with this challenge. And they should not wait for labour shortages to bite before taking action.

Some firms have already come to realise the need to break with the early retirement culture. Innovative practices focus on keeping people in employment by adapting their occupations or by encouraging mobility and flexibility, whether in work time or at the workplace. But such practices have been limited to large companies, such as Renault or Thales, and have yet to spread to small and medium-sized enterprises. Sharing good practices on recruiting over-50s, including to high quality jobs, would help resolve this. Leading by example would also help, and the French state, while at last seeming to recognise the challenge of an ageing public service workforce, could still do more, by encouraging mid-career mobility, for instance, and reviewing early retirement options of their own.

Older people themselves have to feel more welcome in the workplace. The French government has taken action to promote employability, including weeding out “selective” practices. A new law against discrimination in employment was passed in 2001, covering all career levels, including older workers.

Mid-career training is encouraged, and assistance in developing career and skills management has targeted small and medium-sized enterprises in particular. In 2003, France’s social partners concluded a multi-sector agreement on lifelong learning designed to encourage access to training. The agreement became law in 2004. The agreement also sets priorities for workers over 45 and after 20 years in employment. For instance, they can take advantage of a skills audit and those skills acquired on the job may be recognised as being equivalent to an upper secondary qualification.

Health and safety are also key here. After all, older workers tend to suffer the most serious workplace accidents. Preventive measures should be taken, which means adapting the workplace to older worker needs. Simple steps, like more ergonomic desks or production lines can make a difference. Gradual retirement and part-time working schemes should also be better integrated into human resource strategies.

In 2005, the government is seeking to give fresh impetus to policies promoting work for the over-50s, through the Social Cohesion Plan and the Health-at- Work Plan. And negotiations on employment for older workers and strenuous work are already absorbing social partner time. At present, over half of all French wage-earners do not go straight from employment into retirement, but follow various pathways, including early retirement schemes, unemployment and, to a lesser extent, sickness. The government is clearly set on addressing the problem, but for reforms to work, attitudes must also change. Companies and workers have not yet risen up to the challenge. France cannot afford to continue retiring early for much longer. The price of inaction would be too great.

References

OECD (2005), Ageing and Employment Policies: France, Paris.

This report is one of several reports written as part of a thematic review of policies to improve labour market prospects for older workers, launched in 2001 by the OECD Employment, Labour and Social Affairs Committee. Country reports have been prepared on each of the 21 countries that participated in the review.

For more detail, executive summaries and information on how to order, see links below.

©OECD Observer No 251, September 2005




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