According to a study by the Ifo Institute, tailored programs can significantly help older unemployed individuals return to the working world. The research draws on new data from Austria and the Netherlands, providing a comparison of the costs and benefits of such interventions.
Ifo researcher Pia Heckl noted that long-term unemployment is costly for the state, representing a double burden: people receive social benefits while the state simultaneously loses potential tax revenue. She suggested that even more expensive programs can prove worthwhile if they successfully bring the unemployed back to employment.
In Germany, the data shows that in 2025, nearly 47 percent of unemployed persons aged 55 and older were long-term unemployed, compared to 34 percent among those aged 25 to 54. He observed that the longer unemployment lasts, the more difficult it becomes to re-enter the labor market, and for older individuals, this often culminates in an early exit from working life.
The study looked at an example in Austria where long-term unemployed individuals were offered temporarily supported positions entirely funded by the state. Martin Halla of the Economic University of Vienna stated that two years after the program concluded, the likelihood of individuals being employed again was 43 percentage points higher than in the comparison group. Crucially, this positive effect was entirely based on regular, non-subsidized employment.
An analysis looked at a parallel case in the Netherlands, where older unemployed received comprehensive counseling that included incorporating support networks such as former colleagues, friends, and family. One year into their unemployment period, 40 percent of those involved in the program stopped receiving unemployment benefits, compared to 38 percent in the control group. In this Dutch example, the state saved approximately 715 euros per person, while the program only cost 470 euros.
Heckl concluded that experiences from different countries demonstrate that older unemployed people are not a homogenous group. Therefore, programs implemented in Germany should be precisely customized to meet the unique challenges faced by the individuals they aim to assist.
