Ilmakunnas, Pekka and Ilmakunnas, Seija (2012): Age segregation and hiring of older employees: low mobility revisited.
Download (364kB) | Preview
We analyse age segregation in hirings and separations using linked employer-employee data from Finland in the period 1990-2004. This allows us to identify at the firm level employees in different age groups that have been hired during the previous year, and employees who have exited the firms. We analyze firm-level age segregation using segregation curves and Gini indices. The hirings of older employees have clearly been more segregated than exits or the stock of old employees even though hirings have become slightly less segregated towards the end of the period in question. At the same time age segregation in exits and stocks has increased and these trends are not sensitive to small unit bias in measurement. We also examine trends in hiring and exit rates using aggregate data. According to our results the oldest age group is again underrepresented in hirings. There is a positive upward trend in their recruitments related to the increasing cohort size, but it is much weaker than the trend in the relative share of older workers in employment. The exit rate of the older employees indicates cyclical variation while the small number of hirings seems to be insensitive to changing labour demand. We present a decomposition of employment change by age group and with that decomposition we disentangle the role of hirings and exits from factors related to demographics and cohort effects. The latter factors include the effect of the large baby boom generation entering the age group of older employees with higher employment rates than earlier cohorts. Finally, our regression analysis shows that larger firms are more likely to hire older employees, but their hiring rates are lower.
|Item Type:||MPRA Paper|
|Original Title:||Age segregation and hiring of older employees: low mobility revisited|
|Keywords:||ageing; hiring; segregation; labour demand|
|Subjects:||J - Labor and Demographic Economics > J1 - Demographic Economics > J14 - Economics of the Elderly ; Economics of the Handicapped ; Non-Labor Market Discrimination
J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J26 - Retirement ; Retirement Policies
J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J23 - Labor Demand
|Depositing User:||Pekka Ilmakunnas|
|Date Deposited:||26 Mar 2012 14:26|
|Last Modified:||21 Apr 2016 11:42|
Adams, S.J., “Age discrimination legislation and the employment of older workers”, Labour Economics 11, 2004, 219-241.
Adams, S.J. and Heywood, J.S., “The age of hiring and deferred compensation: evidence from Australia”, Economic Record 83, 2007, 174-190.
Aubert, P., Caroli, E., and Roger, M., “New technologies, organization and age: firm-level evidence”, Economic Journal 116, 2006, F73-F93.
Behaghel, L., Crépon, B., and Sédillot, B., “The perverse effects of partial employment protection reform: The case of French older workers”, Journal of Public Economics 92, 2008, 696-721.
Bellman, L. and Brussig, M., “Recruitment and job applications of older jobseekers from the establishments’ perspective”, IZA Discussion Paper No. 2721, 2007.
Carrington, W.J. and Troske, K.R., “On measuring segregation in samples with small units”, Journal of Business and Economic Statistics 15, 1997, 402-409.
Daniel, K. and Heywood, J.S., “The determinants of hiring older workers: UK evidence”, Labour Economics 14, 2007, 35-51.
Daniel, K. and Siebert, W.S., “Does employment protection reduce the demand for unskilled labour?”, International Economic Journal 19, 2005, 197-222.
Disney, R., Hawkes, D. and Heden, Y., “Declining job opportunities for older workers in Britain: the role of job-specific characteristics”, University of Nottingham, mimeo, 2006.
Duncan, O.D. and Duncan, B., “A Methodological Analysis of Segregation Indexes”, American Sociological Review 20, 1955, 210-217.
Garen, J., Berger, M., and Scott, F., “Pensions, non-discrimination policies, and the employment of older workers”, Quarterly Review of Economics and Finance 36, 1996, 417-429.
Hairault, J.-O., Langot, F., and Sopraseuth, T., “Distance to retirement and older workers’ employment: The case for delaying the retirement age”, Journal of the European Economic Association 8, 2010, 1034-1076.
Hakola, T. and Uusitalo, R., “Not so voluntary retirement decisions”, Journal of Public Economics 89, 2005, 2121-2136.
Heywood, J.S., Ho, L.-S., and Wei, X., “The determinants of hiring older workers: evidence from Hong Kong”, Industrial and Labor Relations Review 52, 1999, 444-459.
Heywood, J.S., Jirjahn, U., and Tsertsvardze, G., “Hiring older workers and employing older workers: German evidence”, Journal of Population Economics 23, 2010: 595-615.
Heywood, J.S. and Siebert, W.S., “Understanding the Labour Market for Older Workers: A Survey”, IZA Discussion Paper No. 4033, 2009.
Hirsch, B., Macpherson, D.A., and Hardy, M.A., “Occupational age structure and access for older workers”, Industrial and Labor Relations Review 53, 2000, 401-418.
Hu, L., “The hiring decisions and compensation structures of large firms”, Industrial and Labor Relations Review 56, 2003, 663-681.
Hutchens, R., ”Delayed payment contracts and a firm’s propensity to hire older workers”, Journal of Labor Economics 4, 1986, 439-457.
Hutchens, R, “Do job opportunities decline with age?”, Industrial and Labor Relations Review 42, 1988, 89-99.
Ilmakunnas, P. and Ilmakunnas, S., “Hiring older employees: Do incentives of early retirement channels matter?” Labour Institute for Economic Research, Discussion Paper No. 268, 2011.
Ilmakunnas, P. and Maliranta, M. “Worker inflow, outflow, and churning”, Applied Economics 37, 2005, 1115-1133.
Ilmakunnas, S. and Takala, M., ”Promoting employment among ageing workers: lessons from successful policy changes in Finland”, Geneva Papers on Risk and Insurance – Issues and Practice 30, 2005, 674–692.
Kyyrä, T. and Ollikainen, V., “To search or not to search? The effects of UI benefit extension for the older unemployed”, Journal of Public Economics 92, 2008, 2048-2070.
Kyyrä, T. and Wilke, R., “Reduction in the long-term unemployment of the elderly: a success story from Finland”, Journal of the European Economic Association 5, 2007, 154-182.
Lazear, E., “Why is there mandatory retirement”, Journal of Political Economy 87, 1979, 1261-1284.
Munnell, A. and Sass, S.A., Working Longer. The Solution to the Retirement Income Challenge, Washington D.C.: Brookings Institution Press, 2008.
Pfeifer, C., “An intra-firm perspective on wage profiles and employment of older workers with special reference to human capital and deferred compensation”, Leibniz Universität Hannover, Institute of Labour Economics, Discussion Paper No. 413, 2009.
Saint-Paul, G., “Does the welfare state make older workers unemployable?”, IZA Discussion Paper No. 4440, 2009.
Scott, F.A., Berger, M.C., and Garen, J.E., “Do health insurance and pension costs reduce the job opportunities of older workers?”, Industrial and Labor Relations Review 48, 1995, 775-791
Zwick, T., “Consequences of Seniority Wages on the Employment Structure”, Industrial and Labor Relations Review, forthcoming.