Employment of Older Professionals - Hard Facts Are More Important Than Soft Perceptions

In an international comparison, job market participation of older professionals in Germany is quite low. At times it has been suggested that this fact may be accounted for by a somewhat low esteem in the general appraisal of such employees by personnel managers. A recent study however, conducted by the Centre for European Economic Research (ZEW) in Mannheim, Germany, finds that this does not hold true.

Rather, from the perspective of personnel managers, older professionals even have certain advantages over their younger counterparts and may not initially be disregarded as second class. Yet expressed opinion on this matter does not necessarily itself influence the employment situation of older professionals in Germany. As the ZEW study outlines, employment of older professionals, or lack thereof, is rather due to specific in-company characteristics, such as age of firm, state of technology or corporate governance structures.

The ZEW study thus reveals a differentiated evaluation of older professionals' standing, based on the IAB Establishment Panel 2002 for the state of Baden-Württemberg representing 800 firms with staff of 20 employees or more. While there might be, according to personnel managers, deficits in terms of physical and mental capacities, learning ability and overall flexibility, other qualities may be enhanced. The figure below lists, to name a few, loyalty and attention to detail and, of course, the value of experience. In general older professionals in fact are perceived as equally competent.

These perceptions taken for granted, the ZEW study demonstrates how Germany's comparably low average of older professionals' job market participation may then be accounted for by the above mentioned in-company characteristics. It was found that younger firms show a significantly lower rate of 50+ staff than those carrying a longer tradition. Additionally, firms maintaining the newest technologies are also less likely to staff a large number of employess aged 50 years or older. Finally, firms with corporate governance structures supporting labour representation, such as works councils, will in contrast be more admissive to older employees than firms without such structures. This in turn may be related to the influence of works councils on a firm's lay-off policies.

Contact

Prof. Dr. Thomas Zwick, E-mail: zwick@zew.de

Dr. Bernhard Boockmann, E-mail: boockmann@zew.de