Lost for the labor market: baby boomers give up their jobs earlier

There is already a shortage of skilled workers, and one development could exacerbate this: Many of the baby boomer generation, those born after the war, are retiring before the normal retirement age.

After years of more and more older people remaining in work, the trend among the baby boomers who are now about to retire is stagnating: many are currently retiring at the age of 63 or 64. This means that many older people are leaving the labor market well before the standard retirement age, as reported by the Federal Institute for Population Research (BiB).

The baby boomers are the baby boomers born after the Second World War. An important role is played by the possibility of early retirement without deductions for those who have been insured for particularly long years, the so-called pension at 63, which has existed since 2014. According to BiB, every third person retired in this way in 2021.

Current figures from German pension insurance also show that in recent years more and more people are retiring before the standard retirement age and are accepting pension deductions. According to BiB, this was the case for about a quarter of the new pensioners last year – on average they retired just under 28 months before the standard retirement age.

For the institute, the development “gives cause for concern from a financial and labor market policy point of view”. Due to the size of the baby boomer cohorts, their exit from gainful employment increases the lack of experienced, qualified workers. “The stagnating numbers show that the expansion of employment into older age is not a sure-fire success,” explained Elke Loichinger from the BiB.

To keep workers in the labor force longer, incentives would need to be in place well before retirement. “Once retirement occurs, few return to work.”

In previous years, on the other hand, more and more older people remained in work: between 2000 and 2015, the employment rate among 60 to 64-year-old men more than doubled, and among women of the same age it even quadrupled. According to BiB, this trend was determined by people born between 1940 and 1950 who were employed longer than those born before them.