Age discrimination in hiring older workers—if it exists—is a serious policy problem. An aging population requires more people working until older ages, and many countries are changing retirement systems to encourage this change. Older workers often transition into new jobs at older ages, before fully retiring, so age discrimination in hiring poses a barrier to meeting the challenge of increasing employment of older individuals.
According to researcher David Neumark, most of the convincing evidence of age discrimination in hiring comes from correspondence studies that use fictitious applicants of different ages to apply for jobs, testing whether older workers receive fewer positive responses, but he used a novel approach to test for age discrimination using data from a company with many restaurants.
Over time, this company changed from a hiring method where age was revealed early—at an initial interview—to one at which age was only revealed after a detailed assessment of workers. In the first method, they were treated adversely after the initial interview.
Is this age discrimination, or were older applicants less qualified? Data from the second method is decisive. Older workers were initially assessed as better candidates, and selected for follow-up interviews at a higher rate. But after those interviews, at which their age became apparent, they were less likely to be hired. The implication is that older workers were more qualified. Thus, it was their age, not their qualifications, that led the employer not to hire them.
In light of population aging, policymakers have focused on supply-side incentives, like increasing Social Security’s full retirement age, to encourage people to work at older ages. The research in this paper (as well as other papers) shows that employers should focus on reducing demand-side barriers to older workers’ employment as well.
Read the study in the Journal of Human Resources: “Age Discrimination in Hiring: Evidence from Age-Blind vs. Non-Age-Blind Hiring Procedures” by David Neumark.
David Neumark is Professor of Economics at UCI and affiliated with NBER, IZA, and CESifo.