Social protection for retirees: the diminishing role of employers

Jobs are changing in ways that will reduce benefits for retirees. This paper explores the variety of pressures that will tend to produce this result. One major factor is that employers have been responding to cost pressures and the need for flexibility by redesigning jobs. There has been a trend--which is likely to continue--toward more part-time and temporary jobs, more subcontracting, and more contingent-pay systems. The consequences are complex and not all bad, but for retirees the tendency will be toward fewer, less generous, or less secure benefits. As workers approach retirement age facing the prospect of diminished benefits, increasing numbers of them will have to choose work to maintain their standard of living. At the same time, demographic pressures will gradually push employers to seek new pools of workers, including retirees. Gradually, employers are likely to provide fewer social-protection benefits to older people, but more employment opportunities.