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Considers the reasons for the lack of consensus among the member states of the European Union (EU) on both the scope and extent of an ageism policy. The EU has become increasingly concerned with the problems that are raised by the ageing of the European population. In response to these concerns the EU has began to develop a policy towards older employees. The expectation of the EU is that this policy will help the member states effectively to adjust to the demographic challenge of an ageing population. Assessment of the effectiveness of the approach taken by the EU is made by utilizing economic theories that have been devised by neo‐classical and equal opportunities economists. The prospects for the development of a common EU policy on ageism is discussed and its possible impact on companies operating in the EU is explored.

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