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European Governments Reconsider Creating Jobs Via Early Retirement

June 14, 2013, 12:00 PM
Shutterstock_128424911

What's the Latest Development?

With unemployment rates among young Europeans remaining high, and amid fears of potential civil conflict, some governments are reconsidering using part of their budgets to fund early retirement programs for older workers. It's one of the ideas that may come up at a July meeting hosted by Germany's chancellor Angela Merkel that will address the lack of available jobs. Merkel is a big fan of the idea, noting that such programs have been used in her country since the Great Depression to help solve employment crises. Meanwhile, officials in Italy say that they are looking at programs that will reduce older workers' hours while allowing them to mentor younger workers.

What's the Big Idea?

While most would agree that putting young people to work is a good thing, economists in particular are strongly recommending against using early retirement as a job creation strategy. Not only is there almost no evidence showing that early retirement opens up the job market for younger people, some say it may make matters worse because new retirees tend to spend less, reducing overall demand. Also, as pension systems struggle, national economies simply may not be able to afford to have workers stopping earlier.

Brian Maudsley / Shutterstock.com

Read it at The Wall Street Journal

 

European Governments Recons...

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