Research: Relationship of Age and Unemployment

The Institute for the Study of Labor has published a paper seeking "to gain insights on the relationship between growth and unemployment, when considering heterogeneous agents in terms of age." According to the authors (François Langot and Eva Moreno-Galbis) of "Does the Growth Process Discriminate against Older Workers?":

under the assumption of homogeneous productivity among workers, firms tend to fire older workers more often than young ones, when deciding whether to update or not a technology: there is an equilibrium where the creative destruction effect dominates over the capitalization effect for old workers, whereas the capitalization effect dominates for young workers. This discrimination against older workers can be moderated when we introduce heterogeneity (in terms of productivity) among workers.

Source: Institute for the Study of Labor Discussion Paper 3841 Abstract (November 2008)

Research Study Evaluates Government Programs in United States Helping Older Workers Obtain New Skills

A report by Heldrich Center researchers Carl Van Horn, Ph.D. and Maria Heidkamp reviews the federal government resources available to assist older unemployed job seekers and highlights examples of initiatives undertaken by states, community colleges, nonprofits and community-based organizations, and the private sector to help older workers find another job.

The study, also published as an issue brief by the Sloan Center on Aging & Work--"Older and Out of Work--Employer, Government and Nonprofit Assistance"--follows up on their earlier work. Among their conclusions is that only a small percentage of older unemployed workers will receive post-layoff assistance from their former employer and that finding that next job is likely to be difficult and time consuming--considerably more so than for younger job seekers—-and may require them to prepare for a new
career in a new industry.

While some primarily large employers do provide employees sufficient advance notice of a layoff and access to a range of outplacement and other services, small and mid-sized employers may not have the resources to offer post-layoff benefits. "They may need to seek opportunities to partner with government and nonprofit agencies in order to provide assistance to their older workers targeted for layoff. These opportunities may include participating in regional talent and skills alliances and sector strategies."

Source: John J. Heldrich Center for Workforce Development Home Page (October 16, 2008)

Research: Scope and Impact of Unemployment on Older Americans

A report by Heldrich Center researchers Carl Van Horn, Ph.D. and Maria Heidkamp looking at unemployed older workers finds that older unemployed workers face more significant challenges than their younger jobseeking counterparts. In particular, older unemployed workers take longer to find new jobs, and when they do, it is often in a different occupation, a different industry, and at much lower earnings than in their previous job.

Published as an issue brief by the Sloan Center on Aging & Work, "Older and Out of Work – Trends in Older Worker Displacement" reports that a growing proportion of older adults do not have the option of retiring from work, due in part to rising prices and lack of sufficient savings. Thus, Heidkamp says: "It is time to ask how employment and training programs can be more effective in bringing older unemployed workers back into workplaces where their talents are still needed and valued."

With talent shortages approaching as the Baby Boomer generation reaches retirement age, employers need to proactively ensure that they provide their older workers with a supportive work environment sensitive to their needs. For older workers, this often means providing greater workplace flexibility and benefits packages.

Source: Sloan Center on Aging & Work Issue Brief No. 16 (September 2008)

Taiwan: Numbers of Unemployed Older Workers Increasing

According to the China Post, Taiwan's Council of Labor Affairs has reported that the number of older Taiwanese workers who are unemployed has more than doubled over the past 10 years, indicating increased employment barriers for this group. Specifically, 75,000 workers aged 45-64 in Taiwan were unemployed in 2007, compared with 34,000 workers in 1997.

Of these unemployed workers, 37% were offered employment but turned down the jobs, mainly because the pay offered was too low. Of the remaining workers, 59% were hampered by age restrictions set by employers, while another 19% were not equipped with the skills required by employers. However, it was also acknowledged that the increase in unemployment of older workers was also partly due to the aging of Taiwan's population.

Source: China Post "Number of elderly jobless workers rising" (August 21, 2008)

United Kingdom : Unemployment and Older Workers

Since the mid-1990s there has been a rapid rise in the number of older people in work. In spring 2003 seven in ten people aged between 50 and State Pension Age, and almost one in ten people over State Pension Age, were working. According to the Autumn 2004 ONS Labour Force Survey, older (50 to state pension age) workers’s ILO unemployment rates are lower than those of their younger counterparts--2.9% compared to 3.4% for the 25 to 49 age group and 12.6% for the 16 to 24 age group. In addition, older workers are more likely to be working part-time than the 25 to 49 age group, and self-employment is more common amongst older workers compared to the younger age groups.

Source: "Older people are much more likely to be long-term unemployed" TheMatureMarket.co.uk (May 23, 2005)

AARP Pushes for Fairness to Unemployed Older Workers

After the Pennsylvania House Labor Relations voted in favor of House Bill 163, a measure to allow qualified unemployed workers who are receiving Social Security benefits to get full unemployment compensation, AARP Pennsylvania recognized the action to end the state's practice of discriminating against unemployed older workers. According to AARP, Pennsylvania currently penalizes these unemployed workers by forcing them to forfeit $1 of unemployment compensation for every $2 they receive in Social Security benefits. "This is an unfair situation for older workers," said J. Shane Creamer, AARP Pennsylvania State President. "These workers and their employers contribute to the unemployment compensation system just like any worker. Yet should they lose their job, they are denied their full unemployment compensation payment." Thirteen other states penalize older workers in this manner, and West Virginia and Hawaii enacted legislation earlier this year to enable older workers in those states to collect full unemployment benefits.

Source: News Release PR Newswire (May 12, 2005)