Understanding old-age adaptation policies in Europe: the influence of profit, principles and pressures

Abstract

To cope with an increased proportion of older workers, organisations develop old-age adaptation policies. Two strategies underlie these policies: phasing out and activating. Although the existence of these strategies is widely recognised, the reasons for their presence have rarely been explored. We identify three arguments that explain the extent to which these strategies are present: profit, principles and pressures. We hypothesise that the intensity of the phasing out strategy is higher when it is profitable and easy to replace older workers, when employer's age norms support the principle of treating older workers differently, and when external pressures are high. We also hypothesise that the intensity of the activating strategy is higher when it is profitable but hard to replace older workers, when the employer's age norms reject the principle of treating older workers differently, and when external pressures are high. We use pooled regression analysis to study imputed managerial data from 5,410 organisations in seven European countries. Results confirm the importance of external pressures for the adaptation of both strategies, and of principles for activating. Although policy feasibility is important for the adaption of both strategies, the other profit variables showed mixed results. Net benefits of older workers to the organisation are only important for phasing out, and substitutability only for activating. This paper discusses the wider implications of the study.