Age Differences in Job Displacement, Job Search, and Reemployment
This study examines how the incidence and consequences of job displacement vary by age. Data come primarily from the 1996, 2001, and 2004 panels of the Survey of Income and Program Participation, which follow respondents for up to 48 months. The data span the years 1996 to 2007, covering the 2001 recession but not the 2007-2009 recession. Results show that older workers are less likely than younger workers to lose their jobs, but only because they generally have spent more time with their employers. Older workers who become displaced spend more time unemployed than their younger counterparts and experience greater wage losses when they become reemployed. These findings suggest that some employers are reluctant to hire older workers, and raise questions about the employability of older adults.nThe employment challenges facing older workers have important implications for retirement policy. For example, the debate over increasing Social Security’s retirement age is intensifying. This policy option becomes less desirable when the employment prospects for older Americans are poor. As concern over retirement income security mounts, the option to delay retirement is increasingly viewed as the best way to increase retirement income. This strategy, of course, depends crucially on older adults’ ability to find work. Although many employed seniors may be able to work longer on their existing jobs, our results highlight the difficulty that older Americans without jobs face finding work.