The Budgetary Dilemmas of an Ageing Workforce: A Scenario Study of the Public Sector in the Netherlands

This paper studies the consequences (particularly the budgetary effects) of alternative senior-worker policies in the Dutch public sector. Special attention is paid to: the ongoing process of population ageing; the interaction between the participation in senior-worker schemes and the use of disability and unemployment schemes; and the effect of labour participation of older workers on employment opportunities for younger workers. From the scenario analysis, it appears that policies aimed at influencing the participation in senior-worker schemes will not result in substantial savings. The main conclusion of the study is that ageing of the labour force will lead to substantial cost increases anyway, whatever the early-retirement policy.