Labour Force Participation of Older Workers in Italy: Trends, Causes and Policy Issues

Population ageing in Italy is more pronounced than in most of the other developed countries. Given the very low employment rate for older workers, this is likely to have a negative effect on overall labour force participation in the near future. This paper describes the demographic and labour-market trends for people older than 50, making some comparisons between Italy and other EU countries. It then offers some evidence on the determinants of the individual choice of retirement by looking at some econometric studies showing that the generosity of the public pension scheme is crucial. Finally, the policy measures adopted during the last decade to raise the retirement age are reviewed: the broad pension reforms implemented over the years may have had some effect by curbing pension benefits, but none of the possible alternative measures taken in other European countries has been implemented