Technology, labour market institutions and early retirement

A study identified two impediments to hiring older workers in the future. First, computers and robots could displace older workers doing routine chores. Second, labor market institutions favor early retirement through special privileges and looser unemployment and disability compensation. The study reveals that older workers exposed to digital technologies are more inclined to quit, especially if they can extend unemployment benefits until they retire. Simulations demonstrate that tightening benefit extension eligibility would mostly enhance older workers’ digital technology employment.

Image courtesy of interviewee. December 21, 2023

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