Discrimination Limits Ability of Older Workers to Work Beyond Retirement Age, Study Shows

As baby boomers age, rates of workers aged 65 and over are expected to increase from about 19% currently to 29% in the year 2060.  According to research published by the Federal Reserve Bank of San Francisco (FRBSF), significant impacts are expected to occur with regard to utilization of Social Security and other programs, as the “dependency ratio” – the ratio of non-workers to workers – increases in the coming years.
 
In evaluating options for addressing this issue, one focus is on incentivizing older workers to continue working beyond the traditional retirement age.  The FRBSF study shows that such approach is not without complications, however, as older job applicants face age discrimination in hiring.  The FRBSF study involved the creation of fictitious resumes for three categories of job applicants:  applicants aged 29-31, applicants aged 49-51, and applicants aged 64-66.  The resumes were virtually identical, except for the age difference between applicants.  Resumes were submitted in response to advertisements for job categories that employ large numbers of low-skilled workers of all ages (i.e., administrative assistants, secretaries, janitors, security guards, retail sales).  The FRBSF submitted resumes in response to over 13,000 position vacancies in 12 cities across 11 states.
 
After analyzing the results of the more than 40,000 resumes that were submitted, the FRBSF concluded: “First, there is evidence of age discrimination in hiring, for both women and men. Second, while both middle-aged and older applicants experience discrimination relative to younger applicants, older applicants—those near the age of retirement—experience more age discrimination. And third, women experience more age discrimination than men do. We do not have evidence on why age discrimination may be worse for older women, but it could be because applicant appearance matters in our sample of low-skilled jobs, and the effects of aging on physical appearance are evaluated more harshly for women than for men.” Citation omitted.
 
Given this, the FRBSF posits that efforts to increase the supply of older workers through incentivizing continued work beyond age 65 will only be effective if the barriers limiting the demand for older workers in the workforce are also addressed.  Read more.