Feb 25 2010: Hot off the presses! A new study published yesterday by the Institute for Research on Public Policy says Too many older laid-off workers are forced into early retirement because of poor re-employment prospects; creative policies are needed to encourage them to stay in the labour market. Download a copy of the study titled: Labour-Force Participation of Older Displaced Workers in Canada: Should I Stay or Should I Go
The authors say that displaced older workers can find it hard to find new employment because of their long job tenure in their previous positions, where they utilized sector-specific skills that that are unlikely to be easily transferable. According to this study, laid off workers over 45 who go back to work stand to lose about 40% of the earnings they received at their last job. In the end, many may opt for early retirement rather than accept a lower-paying job. The study features some surprising and shocking statistics: about a quarter of works laid off between the ages of 45 and 59 will retire within five years increasing to 70% for those over 60.
These outcomes are obviously at odds with what it economically viable and with the paradigm shift we are currently experiencing acknowledging the need for older workers to stay on the job a little longer.
As a result, the authors insist government needs to come up with some creative policies to encourage such displaced workers to remain in the labour market. Their preferred proposal is to introduce wage insurance — a program to temporarily top up earnings to help people re-establish their earning power.
Keywords: work, retirement, seniors