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The increasing polarization of the labour market is closely related to the spread of non‐standard employment relationships that largely results from poor risk management of critical transitions over the life course. The question, therefore, arises whether labour market regulation, in particular unemployment insurance, is still properly designed for the new world of work. This article argues for an extension of unemployment insurance towards a system of employment insurance by summarizing the concept of transitional labour markets, indicating the risks that challenge current and future labour markets, laying the theoretical groundwork, and discussing the main features of an employment insurance system.

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Based on the theory of Transitional Labour Markets (TLM), this article derives normative criteria for 'active ageing'. We argue why and under what conditions more employment for older people can help to improve their quality of life and can thus be considered an important part of future social policy. To this end, the article presents a brief review of the employment situation of older workers (aged 55-64) in the different European countries so as to identify what precisely might be required at the level of labour market policy. It systematically discusses the promoting and inhibiting factors behind the significant variation in the employment of older workers across Europe, and tests their explanatory value in a simple statistical model. Finally, we put the quantitative evidence into the perspective of policy examples, summing up some general strategies for 'active ageing'.