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Age Differences in Job Displacement, Job Search, and Reemployment

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  • Richard W. Johnson
  • Corina Mommaerts

Abstract

Working longer is often hailed as the best way to increase retirement incomes, yet this strategy depends crucially on seniors' ability to find work and hold on to their jobs. 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 (SIPP), 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. When older workers lose their jobs, they appear to have more trouble than their younger counterparts finding work. Compared with their counterparts ages 25 to 34, displaced men ages 50 to 61 are 39 percent less likely to become reemployed each month and displaced women ages 50 to 61 are 18 percent less likely. When older displaced workers find jobs, they typically experience sharp wage declines. Among displaced men who become reemployed, for example, the median hourly wage on the new job falls 20 percent below the median wage on the old job at ages 50 to 61, compared with only 2 percent at ages 25 to 34. These findings suggest that some employers are reluctant to hire older workers, and raise questions about the employability of older adults.

Suggested Citation

  • Richard W. Johnson & Corina Mommaerts, 2011. "Age Differences in Job Displacement, Job Search, and Reemployment," Working Papers, Center for Retirement Research at Boston College wp2011-3, Center for Retirement Research, revised Jan 2011.
  • Handle: RePEc:crr:crrwps:wp2011-3
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    File URL: http://crr.bc.edu/working-papers/age-differences-in-job-displacement-job-search-and-reemployment/
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    Cited by:

    1. Michael Kind, 2015. "A Level Playing Field: An Optimal Weighting Scheme of Dismissal Protection Characteristics," LABOUR, CEIS, vol. 29(1), pages 79-99, March.
    2. Joelle Saad-Lessler & Teresa Ghilarducci, 2013. "New Policies for an Older Unemployed Population," SCEPA working paper series. SCEPA's main areas of research are macroeconomic policy, inequality and poverty, and globalization. 2013-3, Schwartz Center for Economic Policy Analysis (SCEPA), The New School.
    3. Sudipto Banerjee & David Blau, 2016. "Employment Trends by Age in the United States: Why Are Older Workers Different?," Journal of Human Resources, University of Wisconsin Press, vol. 51(1), pages 163-199.
    4. Claudio Michelacci & Hernán Ruffo, 2015. "Optimal Life Cycle Unemployment Insurance," American Economic Review, American Economic Association, vol. 105(2), pages 816-859, February.
    5. William T. Dickens & Robert K. Triest, 2012. "Potential effects of the Great Recession on the U.S. labor market," Working Papers 12-9, Federal Reserve Bank of Boston.
    6. Sudipto Banerjee & David Blau, 2013. "Employment Trends by Age in the United States: Why Are Older Workers Different?," Working Papers wp285, University of Michigan, Michigan Retirement Research Center.
    7. Jennifer Laird, 2017. "Public Sector Employment Inequality in the United States and the Great Recession," Demography, Springer;Population Association of America (PAA), vol. 54(1), pages 391-411, February.
    8. Alan L. Gustman & Thomas L. Steinmeier & Nahid Tabatabai, 2011. "How Did the Recession of 2007-2009 Affect the Wealth and Retirement of the Near Retirement Age Population in the Health and Retirement Study?," NBER Working Papers 17547, National Bureau of Economic Research, Inc.
    9. repec:eee:hapoch:v1_237 is not listed on IDEAS
    10. Robert Clark & Melinda Morrill, 2013. "Increasing Work Life: The Role Of The Employer," Discussion Papers 13-016, Stanford Institute for Economic Policy Research.
    11. Fang, H., 2016. "Insurance Markets for the Elderly," Handbook of the Economics of Population Aging, Elsevier.

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