"The increase in the employment rate of older workers in Israel is due to the postponement of the retirement age in 2004" (Photo: ShutterStock)
In the last two decades, there has been an increase in the employment rate of senior citizens in Israel.
According to the study "The Economic Benefit of Employing Older Workers" conducted by the Aharon Institute for Economic Policy at Reichman University for the Ministry of Social Equality and the Joint Organization, in 2000 the employment rate of men and women in Israel aged 55-59 was 63.68% and 48.05% respectively, while In 2019, the employment rate of elderly men in Israel was 77.37% and the employment rate of elderly women was 68.51%.
"The increase in the employment rate of older workers in Israel stems from the postponement of the retirement age in 2004. The employment rate of senior citizens in Israel is considered high on a global scale, among other things due to economic reasons - there are immigrants who immigrated to Israel without pension plans, or self-employed people who did not set aside enough money for their pension (only In 2008, a mandatory pension law was enacted for the self-employed). The low old-age pension also leads senior citizens to go to work. There are senior citizens who earn high wages and choose to continue working to maintain their standard of living. In addition, many older people work because employment gives them meaning and contributes to their satisfaction," says senior researcher Dr. Hela Axelred who conducted the study together with Prof. Zvi Eckstein, head of the institute, and Dr. Tali Larom.
Despite the increase in the employment rate of seniors in Israel over the years, there are other countries in the OECD where the employment rate is higher.
According to the study, Israel is in a relatively low place in terms of the employment rate of workers after retirement age compared to other countries such as Denmark, the Netherlands and Sweden.
In Sweden, for example, the employment rate of men aged 55-59 in 2019 was 86.09% compared to Israel where the percentage of older men employed in 2019 was 77.37%.
"The retirement age can be raised or abolished completely, thus encouraging the employment of adults" (Photo: ShutterStock)
Hello, what is the reason for this gap between Israel and other countries in the world?
"In other countries, various policy measures were taken that encouraged the employment of workers after retirement. In Sweden, for example, the state granted tax credits to workers over the age of 65, and this benefit kept many veteran workers in the labor market. In Germany, they carried out a reform that included a reduction in early retirement benefits, which led to lower viability of early retirement. At the same time, the state raised the feasibility of postponing retirement. As a result, seniors delayed retirement by an average of 10 months. In addition, Germany reduced the maximum period of receiving unemployment benefits - from 32 months to 18 months In Denmark, a reform began in 2014 that greatly contributed to the employment rate of older workers - everyone who works in old age receives a universal wage, which contributes to transparency and increases incentives to work. Unemployed people who managed to find work at a late age receive a tax credit, and at the same time the effective marginal tax rate for full-time workers who continue has been reduced. to work after retirement age."
According to the study, another step that led to an increase in the employment rate of older workers in other countries of the world, is the abolition of the obligation to retire from work.
Today in Israel the retirement age for women is 62 and is gradually increasing to 65 and the retirement age for men is 67. On the other hand, in 2011 Great Britain abolished the retirement age for work and also allowed workers over the age of 65 to continue working.
Canada also took this step, which led to an increase in the employment rate of older citizens.
"There is a possibility to study successful policy measures taken in other countries and adopt them in Israel," says Hela.
"In general, financial incentives always have a strong effect and lead to the changes we wish for. There are regulations and regulations that make work less worthwhile. For example, in the public sector, people are offered to retire at the age of 55, when they have another 30 years to live. Instead of early retirement, you can offer a replacement position, a change in the scope of the position or to encourage professional training of veteran employees".
Yossi Heyman (Photo: Eric Sultan)
Yossi Hayman, CEO of Joint-Eshel (a division within Joint Israel), which works to create solutions for optimal aging in an age of 100 years of life, explains why it is very important to encourage the employment of adults in Israel: "Life expectancy in Israel continues to increase , and in 2040 there are expected to be 2 million citizens over the age of 65. As the senior population grows, it is important that more older people go out to work.
Working people contribute to economic growth in a country because they pay taxes.
Beyond that, the research we conducted found that work contributes not only in the economic aspect, but also gives meaning.
Other studies have found that work contributes to physical and functional health in the third age."
What steps can be taken to increase the employment rate of senior citizens?
"The retirement age can be raised or abolished completely, thus encouraging the employment of adults. In addition, there is the issue of an old-age pension - after retirement age, the senior citizen receives an old-age pension. It is important that the state make it possible to receive the full old-age pension without it being conditional on an income test. government policy, the employer also has an obligation to develop the employee throughout the years of his career and to provide him with new skills. An employee who does not develop and does not undergo professional training during his life, may lose his relevance in the labor market. In addition, it is also necessary to change attitudes - many people fantasize about Retirement and vacations around the world the day after retirement. However, after returning from vacation, they soon discover that they are meaningless without work and that they have no reason to get up in the morning. The lack of employment may cause a deterioration in one's health and cognitive function. It is important to raise awareness that employment in the elderly contributes greatly for the senior citizen's quality of life".
It should be noted that the amount of the offset ceiling from the senior citizen's pension up to the age of 70 is expected to increase, so that it is possible to increase income and also receive an old age pension.
Until the year 2020, the height of the ceiling was 6,000 NIS per individual, in 2021 the height increased to 6,750 NIS per individual and in 2023 it will rise to 7,750 NIS per individual.
To check the amount of the old-age pension to which you are entitled, visit the National Insurance website
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