Table 1 Recent changes in labor market policies affecting older workers and public pension regulations in Germany

Unemployment compensation

2004

Lower duration of unemployment benefit I (UB I) for older workers (from a maximum of 32 months to a maximum of 18 months) and tightening of entitlement criteria regarding an individual’s previous employment record; became first effective in 2006

2005

Integration of social assistance and unemployment assistance into the new means-tested unemployment benefit II which replaces social assistance for all “employable” people

2008

Longer duration of unemployment benefits for older workers (from a maximum of 18 months to a maximum of 24 months)

Special labor market programs for older workers

2003

In-work benefits (Entgeltsicherung) to unemployed people aged 50 years and older who are entitled to UB I

2003

Reduced social security contributions on “marginal” employment (“mini-” and “midi-jobs”)

2004

Temporary wage subsidies (Eingliederungszuschuss) to firms employing people with severe placement difficulties including old age; integration of special subsidy for older workers into general temporary wage subsidy for “hard-to-place” people

2007

Re-introduction of a special subsidy for unemployed people aged 50 years and older and introduction of a wage-subsidy voucher for older people

Reforms of public pension regulations

1992

Introduction of deduction factors for early retirement (0.3% per month before the legal retirement age), fully phased in by 1999 for young birth cohorts

1994

Lengthening of regulation which imply that unemployed being 58 or older have not to be at the disposal of unemployment agencies and are not counted as unemployed (until 2000)

1997

Raising of retirement age for long-term insured from 63 to 65 years (stepwise 2000 until 2001)

and for women from 60 to 65 years (stepwise 2000 until 2004)

1999

Raising of retirement age for disabled (stepwise beginning in 2000)

2000

Lengthening of regulation which imply that unemployed being 58 or older have not to be at the disposal of unemployed agencies and are not counted as unemployed (until 2005)

2001

Reform of pensions for persons who are not capable for work

Introduction of subsidy of a supplementary capital-based private pension (“Riesterrente”)

2005

Lengthening of regulation which imply that unemployed being 58 or older have not to be at the disposal of unemployed agencies and are not counted as unemployed (until 2007)

2008

Raising of general retirement age from 65 to 67 years (stepwise from 2012 until 2029)

2009

End of public subsidies for partial retirement schemes

2014

Early retirement at 63 for long-term insured people without pension deductions