Age Discrimination's Challenge to the American Economy.

• Author: Button, Patrick
• Position: Research Summaries

Age discrimination is an important problem and challenge in the United States and elsewhere, given that policymakers are trying to lengthen work lives of older people in response to population aging. We have been studying many dimensions of age discrimination, measuring its importance in the US economy, understanding the impact of policies intended to combat it, and exploring alternative ways that protections against age discrimination can be strengthened.

Age Discrimination in Employment

Indirect evidence on age discrimination comes from comparing observed behavior of older and younger workers. For example, older workers typically have longer unemployment durations. This difference grows during economic down-turns like the Great Recession. However, this could reflect differences in the jobs that older and younger workers are willing to accept, rather than age discrimination in hiring. Similarly, workers near traditional retirement ages, especially women, experienced larger employment losses during the COVID pandemic and the related recession, which could be due to age discrimination but could also reflect factors such as greater sensitivity of older workers to the risk of infection in the workplace. (1)

One approach to isolating the effect of age discrimination is to use survey data on self-reports of the experience of age discrimination. (2) Evidence from this approach indicates that workers do perceive age discrimination. Moreover, this perception leads to a higher likelihood of leaving the job and a lower likelihood of remaining employed--illustrating how perceived age discrimination can frustrate the goal of encouraging employment at older ages.

Researchers studying discrimination--including age discrimination--have turned increasingly to experimental methods, especially correspondence studies, to provide rigorous evidence on discrimination in hiring. Hiring is important to extending working lives because many workers take jobs at older ages subsequent to their career jobs. Correspondence studies create artificial applicants and measure discrimination as differences in callbacks for job interviews. We conducted a large-scale correspondence study designed to provide evidence on age discrimination in hiring, overcoming potential biases in past studies (3) through the implementation of new econometric methods. (4) We submitted resumes in response to ads for jobs that employ large numbers of fairly low-skilled workers of all ages, and that hire both older and younger workers, including administrative assistants and secretaries (female applicants); janitors and security guards (male applicants); and retail sales (both genders). We sent of applications of otherwise identical young, middle-aged, and older fictitious workers to more than 13,000 positions in 12 cities--more than 40,000 putative applicants. Overall, the callback rate was higher for younger applicants than for older applicants, pointing to age discrimination in hiring [Figure 1]. These results--which hold up in a number of more sophisticated analyses--provide evidence of discrimination against both older women and older men, with the evidence also indicating that women face worse age discrimination than men. These findings are consistent with many other studies that find evidence of age discrimination in hiring, especially for women.

There is other evidence of age discrimination in hiring from nonexperimental approaches. In data from a single company hiring across multiple stores, a change in hiring procedure from in-person interviews to age-blind online assessments was rolled out over time. The in-person interviews, in which the interviewer could assess age immediately, led to lower hiring of older applicants. Older applicants fared better in the age--blind online assessments, getting more interviews--likely because of more work...