Do Age Discrimination Laws Protect Older Workers? Evidence from the Contemporary Labor Market

• In Event: Labor Market and Program Participation Impacts of Government Downsizing and Policies Aimed at Older Workers

Abstract

In recent years, experimental correspondence studies have been frequently used to study labor market discrimination, but these only provide evidence on interview call-backs, leaving us without good evidence on important outcomes like wages, employment, and retirement. Such outcomes can be studied when discrimination laws change, but for most forms of discrimination there have not been changes since the 1960s, so whether these outcomes are impacted in the modern labor market is unknown. However, there is one form of discrimination where the law has changed in recent years: age discrimination. In 2009, an unexpected Supreme Court decision weakened federal age discrimination protections for older workers. In the fifteen years since, however, courts have ruled that protections are stronger under some states’ laws, thereby changing the age discrimination laws in those jurisdictions. We document these law changes via an extensive review of court cases in every state, and estimate whether their stronger protections improve employment outcomes for older workers. Using a synthetic difference-in-differences approach and data from the Current Population Survey, we find that the earnings of workers ages 50 to 75 increase by over a thousand dollars per year in response to the law changes. These effects are driven most strongly by middle-aged men, though women on the older end of our age range also experience increased earnings. We also find evidence of greater labor force attachment for both men and women, a result driven almost entirely by workers over age 65. Our results are consistent with age discrimination still affecting some older workers in the contemporary economy but show that stronger policies can provide protection and improve these workers’ employment outcomes.

Author

• Scott J Barkowski, University at Buffalo
  Presenting Author