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Older employees do not cost more, study shows

© USAF
© USAF

Workers over the age of 55 are not too expensive because of their demand for service premiums, according to a study by the European institute Eurofound. Conventional wisdom has it that the over 55s are pricing themselves out of jobs because companies find it cheaper to employ young people on lower wages, even although they lose out on the experience of an older worker.

However the study shows that while Belgium does belong to a group of countries where length of service increases wages, the differences are not decisive, and the effect evens out over time. According to Sem Vandekerckhove of the university of Leuven, a more important issue in the minds of employers is not so much the length of service premium, but a mindset among bosses and other workers alike which tends to prefer younger people.

In Belgium the link between length of service and wages is moderate, compared for example with the Netherlands and Germany, the Eurofound study shows. Within its group of countries, Belgium does worse than only Finland and Sweden on that score.

“The report undermines the position that this country is very exceptional,” Vandekerckhove said. “Belgium is relatively moderate in this respect, it really doesn’t stand out.” The effect is less noticeable, he explained, among workers than among management staff, and even there, the effect is limited, tending to even out over time, whereas in countries like Spain and Portugal, service gains go on without limit.

In Belgium, despite the figures, over-55s are only around 50% in work, compared to two-thirds in Sweden. The government aims to tackle the employment rate problem by amending the rules on service premiums, but the new study shows that approach may not be the solution, since wage levels as a result of length of service appears not to be the problem in the first place.

Alan Hope
The Brussels Times

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