Reforming Early Retirement in Europe, Japan

Since the 1970s early exit from work has become a major challenge in modern welfare states. Governments, employers, and unions alike once thought of early retirement as a peaceful solution to the economic problems of mass unemployment and industrial restructuring. Today governments and international organizations advocate the postponement of retirement and an increase in activity among older workers. Comparing the USA, eight European countries, and Japan, this book demonstrates significant cross-national differences in early retirement across countries and over time. The study evaluates the impact of major variations in welfare regimes, production systems, and labor relations. It stresses the importance of the 'pull factor' of extensive welfare state provisions, particularly in Continental Europe; the 'push factor' of labor shedding strategies by firms, particularly in Anglo-American market economies; and the role of employers and worker representatives in negotiating retirement policies, particularly in coordinated market economies. Over the last three decades, early retirement has become a popular social policy and employment practice in the workplace, adding to the fiscal crises and employment problems of today's welfare states. Attempts to reverse early retirement policies have led to major reform debates. Unilateral government policies to cut back on social benefits have not had the expected employment results due to resistance from employers, workers, and their organizations. Successful reforms require the cooperation of both sides. This study provides comprehensive empirical analysis and a balanced approach to studying both the pull and the push factors affecting early exit from work needed to understand the development of early retirement regimes.

Bernhard Ebbinghaus is Professor of Macrosociology at the University of Mannheim and Head of the Research Department on European Societies and their Integration at the Mannheim Centre for European Social Research (MZES). He received his Ph.D. from the European University Institute in Florence and his Habilitation from the University of Cologne. He was Senior Researcher at the Max Planck Institute for the Study of Societies in Cologne, Kennedy Fellow at Harvard University, and visiting professor at the universities of Wisconsin-Madison and Jena. His main research interests are comparative social policy, industrial relations, and labour market developments in Europe, Japan, and the USA.

List of Figures	p. xiii
List of Tables	p. xiv
Abbreviations	p. xvi
Exploring interests and institutions	p. 1
Introduction: The paradox of early exit from work	p. 3
Common trends, diverse trajectories	p. 7
Reform efforts to reverse early exit	p. 9
Combining pull and push perspectives	p. 11
Comparing regimes	p. 15
An overview of the study	p. 19
Actor constellations and interest coalitions: Labor, employers, and the state	p. 22
Actor interests at workplace level	p. 23
Why would older workers retire early?	p. 24
Why would employers induce early exit from work?	p. 29
Why would workplace representatives support early retirement?	p. 34
Why do unions, employers, and the state 'collude'?	p. 36
Organized labor and the state: Extending social rights	p. 39
Organized labor and the state: Reducing labor supply	p. 41
Employers and the state: Buying social peace	p. 43
Employers and the state: Negotiating wage moderation	p. 45
Organized labor and employers: Controlling exit	p. 46
Organized labor and employers: Externalizing social costs	p. 48
Bringing in institutions	p. 49
Protection, production, and partnership institutions: From institutional affinities to complementarities	p. 51
Comparative typologies as heuristic tools	p. 52
Three worlds of welfare-state regimes revisited	p. 56
Varieties of Capitalism juxtaposed	p. 63
Labor relations compared	p. 69
From institutional affinities to complementarities	p. 76
Institutional affinities and complementarities under pressure	p. 76
Institutional affinities and their consequences for employment regimes	p. 78
Regime configurations and early exit from work	p. 83
Comparing early exit regimes	p. 85
Ever earlier retirement: Comparing employment trajectories	p. 87
The rise in inactivity among older workers	p. 88
The institutionalization of a 'normal' pension age	p. 88
The decline in participation levels	p. 91
Unemployment as a bridging pension	p. 93
The decline of employment rates in preretirement age	p. 96
Partial exit and temporary employment	p. 100
The trend toward early exit from work	p. 103
Measuring early exit from work	p. 103
Early exit from work before age 65	p. 104
Even earlier exit before age 60	p. 109
How many early exit trajectories are there?	p. 112
The protection-pull factors: Multiple pathways to early exit	p. 115
Institutionalized pathways to early exit	p. 116
The early pension pathway	p. 118
The flexible and partial pension pathways	p. 123
The special preretirement pathway	p. 126
The unemployment pathway	p. 130
The disability pathway	p. 136
The institutionalization of early exit regimes	p. 143
The unintended consequences of past reforms	p. 144
Muddling through rising mass unemployment	p. 146
Putting on the brakes without slowing down	p. 147
Early exit regimes at their peak	p. 150
Is early retirement an (un)intended consequence?	p. 155
The production-push factors: The political economy of labor shedding	p. 157
Production-related pull factors	p. 158
Private occupational pensions between pull and push	p. 158
Occupational welfare as a private early exit pathway	p. 166
Structural push factors	p. 172
Deindustrialization and public sector expansion	p. 172
Age-related skill profiles and sectoral exit patterns	p. 175
Cyclical and mass unemployment as push factors	p. 178
Institutional push factors	p. 180
Union movements between pull and push	p. 180
Employment protection as push factor	p. 184
Production systems as push factors	p. 187
Corporate and financial governance as push factors	p. 194
Can the varieties of capitalism explain early exit regimes?	p. 196
Reform obstacles and opportunities	p. 201
Exit from early retirement: Paradigm shifts, policy reversals, and reform obstacles	p. 203
Paradigm shifts in early exit policies	p. 204
Raising the statutory retirement age	p. 208
Reforming disability insurance	p. 213
Closing special early retirement programs	p. 219
From long-term unemployment to activation policies	p. 223
Gradual retirement and part-time work	p. 230
Learning the lessons of policy reversal	p. 234
Reversing exit pathways	p. 234
The obstacles to policy reversal	p. 240
Cross-national reform patterns	p. 242
Conclusion: From path dependence to path departure?	p. 250
Early exit regimes compared	p. 252
The actors' interests	p. 252
Protection, production, and partnership institutions	p. 253
Early exit trajectories	p. 256
The protection-pull thesis	p. 257
The production-push thesis	p. 259
Reversing early exit from work	p. 262
Going beyond path dependence	p. 266
Unintended consequences and path dependence	p. 266
Toward institutional change and path departure	p. 271
Policy implications for aging societies	p. 274
Appendix Note	p. 278
References	p. 279
Index	p. 315
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Reforming Early Retirement in Europe, Japan and the USA

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