The Netherlands should make it easier to sack people and increase the age at which state pensions are payable from 65 to 67, the Organisation of European Cooperation and Development says in its latest report on the Dutch economy.
The measures are necessary to pay for the cost of the greying population, the OECD says.
The Paris-based organisation points out that the Dutch state pension system (AOW) has not been reformed since its creation in 1957, even though life expectancy has increased by six years.
In addition, Dutch redundancy law is currently far too rigid, the OECD says. In particular, the high compensation deals payable to older staff make it difficult for companies to sack staff and harder for people without work to find a job, the organisation says.
The Dutch government abandoned efforts to reform redundancy law last year after Labour ministers rebelled. Instead, it has set up a special committee to advise it on getting some 200,000 long-term jobless back into work.
Reacting to the report, economic affairs minister Maria van der Hoeven says the government has no intention of increasing the retirement age. Instead ministers are focusing on reducing the take-up of early retirement schemes and encouraging people to work longer hours, she says.
The OECD report notes that relatively few people in their 60s work in the Netherlands compared with other industrialised countries. It calls for a more flexible approach to sick pay for older workers to encourage firms to keep on staff once they reach the age of 65.
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