Seniors for Hire?

An Aging
Population, Age
Discrimination, and the
Impact of Discrimination Laws
Patrick Button
Tulane University
 Rapidly Aging Population

The share of the population 65+

(seniors) was 9.0% in 1960, increased
to 13.0% in 2010.
Share of seniors in working-age
population is currently 19.0%, projected
to be 29% by 2060.
 Increasing Labor Force
Participation of Seniors
Meanwhile, seniors are also working longer.
Their labor force participation rate (% working
or looking for work) has been increasing
rapidly, esp. for senior women.
Men 65+ : 16.5% in Mar. 1985 to 20.2% in
Mar. 2017
Women 65+ : 10.0% in Mar. 2000 to 15.9% in
Mar. 2017
 Putting it Together
The aging population (more seniors) plus the
increased LFP rate of seniors (seniors more
likely to work) both increase make seniors a
larger proportion of the labor force.
From Mar. 1997 to Mar. 2017, proportion of
senior men in LF doubled (1.7% to 3.4%).
For senior women, more than doubled (1.2%,
2.7%).
 Proportion of the Labor Force
that is Senior Women and Men
How do Seniors Work Longer?

Employment could increase by

increasing the duration at existing jobs
(retiring later) or by hiring into new jobs.
Research suggests that the main way
seniors work into older ages is by taking
partial retirement or bridge jobs (e.g.,
Johnson et al., 2009).
 Bridge Jobs
These are jobs that are more flexible, either
more flexible hours/shifts or have job
requirements that better fit with the
preferences of seniors.
Common even for individuals to retire and still
work in these jobs (partial retirement) or
come out of retirement to take these jobs
(un-retirement) (Maestas, 2010).
 Why are Seniors Working
Longer?
There are push and pull factors.
Pull = personal reasons/preference for
working longer (voluntary)
Push = external forces that push
seniors into the labor force when they
wouldnt otherwise go (involuntary)
 Pull Factors
Health is improving at older ages as medicine
improves.
Fewer declines in cognitive and physical skills in
recent generations.
Many skills do not decline near retirement age
(e.g., verbal abilities, quantitative abilities, some
problem solving abilities, control movement,
stamina) (Belbase et al., 2015)
Work is tied to identity (Riach and Loretto, 2009)
and is tied to improved health (Calvo, 2006).
 Push Factors
Poverty rates are high for seniors,
especially women (Sandall and Iams, 1997)
due to lack of income.
Income sources: Social Security, Pensions,
Private Savings all low.
 Push Factors SS Benefits
Social Security benefits are low, around 41% of
previous earnings (Munnell and Sass, 2007)
SS benefits were cut by the increase in the full-
benefits retirement age from 65 to 67
Future increases to the retirement age or to SS
benefits are likely required, since the SS Trust
Fund is expected to be exhausted by 2037 (SS
Board of Trustees, 2009)
 Push Factors - Pensions

Less than half of seniors have

employer-sponsored pensions
Typical pension has a balance of only
$60,000 at retirement (Munnell and
Sunden, 2006)
 Push Factors Personal
Savings
Personal savings is also low
Almost all the savings undertaken by
the working-age population occurred in
pension plans, and in recent years the
saving rate outside of pensions has
actually been negative (Munnell and
Sass, 2007)
 Importance of Hiring

Since most of the increased employment of

seniors occurs through bridge jobs,
increasing hiring is important to reduce
poverty for seniors and to reduce pressure
on the SS Trust Fund (avoiding bigger SS
cuts in the future).
However, age discrimination remains a
barrier.
 Evidence of Age
Discrimination
Best evidence to quantify age
discrimination comes from resume-
correspondence studies (Neumark,
2016).
Studies create fictitious-but-realistic job
applicants that are on-average identical
except for age**, which is signaled
through graduation year.
 Resume Correspondence
Studies
Resumes then sent to actual job
openings.
Hiring discrimination measured by
comparing the interview rate.
Most discrimination occurs at the
interview offer stage (90%, according to
International Labor Organization
studies).
 Neumark, Burn, and Button
(2015)
Largest resume study to date, over 40,000
resumes sent to 13,000 jobs in 12 cities.
Common bridge jobs: retail sales (men and
women), admin. assistant (women), janitor
(men), security (men)
Resumes were for young (age 30), middle
age (50) and older (65). Age 65 is new to the
literature.
Interview (Callback) Rates
 Age Discrimination Laws
Federal: Age Discrimination in Employment Act
(ADEA) of 1968, all but three states have similar,
but sometimes broader or stronger, state laws.
To what extent can age discrimination laws reduce
age discrimination in hiring?
Theory and empirical studies provide mixed
predictions.
Evidence suggests laws dont protect older women.
 Age Laws - Theory
Law forbids age discrimination in hiring, so this might
suggest an increase in hiring of older workers.
However, its hard to detect hiring discrimination, and
damages are low, so attorneys are less likely to take
those cases.
The law creates a negative incentive to hire an older
worker because they are harder to get rid of.
Terminating an older worker, for discriminatory
reasons or not, imposes more legal risk.
 Age Laws - Empirical

Empirical studies seek to examine

changes in age discrimination law over
time to see how those changes have
affected employment.
Results lean positive, showing that
expansions of age discrimination law
improve employment outcomes.
 Intersectional Age-Plus-Sex
Discrimination
Older women can be discriminated against as
an intersectional group: not just because they
are female or because they are old, but the
combination of the two.
Hollywood is a good example.
 Older Women Fall in the
Cracks
The ADEA covers age, while Title VII of the
Civil Rights Act covers discrimination on the
basis of sex, race, etc.
Because age and sex are covered in
separate laws, courts have been reluctant to
allow for an intersectional claim.
Meanwhile, intersectional claims are readily
allowed for sex and race, or anything where
both are under Title VII
 Weakening of the ADEA

Another factor weakening the ADEA is

the Gross v. FBL Financial Services,
Inc., Supreme Court decision.
Gross made it so that the plaintiff has to
prove by preponderance of the
evidence that age was the but for
cause for the alleged employment
discrimination.
 Weakening of the ADEA

No longer possible to use a mixed-

motive framework.
This makes all cases harder to prove,
especially for women who want to use
an intersectional claim since they cant
claim that discrimination was but for
age only.
 Summary

An aging population with increasing

need for older workers to work longer
means that older workers are becoming
a larger part of the labor force.
Thus issues such as poverty among
seniors and age discrimination are more
important.
 Summary
We want to support older workers who wish
to work longer, but age discrimination is a
barrier, especially for women.
Laws may help, but they dont cover older
women as much.
Need to explore if strengthening age
discrimination laws especially for older
women could remove discriminatory
barriers.