Retirement

Are employers willing to hire older workers? – Center for Retirement Research

A series of studies suggest a tempered optimism at best.

Larry Fink once again raised the question of the appropriate retirement age in his annual letter to BlackRock investors. Certainly, with improved life expectancy and health – at least for a segment of the population – longer careers can be a way to ensure an adequate retirement.

But workers are only one side of the market. On the other side are the employers. Are employers willing to hire and retain them? My colleague Geoff Sanzenbacher just completed a capstone brief that summarizes several recent studies we’ve done on demand for older workers.

Are today’s older workers good for business? For this analysis, the researchers combined three data sets that allowed them to track businesses over time and on productivity (revenue/employee) and profitability (revenue/payroll) for older versus younger workers. Can estimate the effect of exchange. This estimation was done in two ways: 1) in a way that created correlation across many industries; and 2) only in manufacturing, exploiting the special characteristics of that industry to achieve useful results.

In terms of productivity, older workers do not appear to be less productive. On profits, the picture is more lopsided, with estimates generally indicating that a larger share of older workers is associated with lower profits. But, a more sophisticated estimation method – which attempted to derive empirical results – found no evidence of lower manufacturing returns for firms with an older workforce.

How do today’s employers view older workers? Here we have two studies.

What do today’s employers say about older workers? In 2019 – before the pandemic – the center launched a telephone survey of employers on workers’ productivity and their views on costs.

Employers’ perceptions roughly correspond to the objective measures of worker value shown above. Majorities say older workers are as productive as workers under 55, with a larger share seeing them as more productive (see Figure 1). In terms of cost, the majority of employers consider older workers to be just as expensive, although a large minority consider them more expensive than younger workers.

Do today’s employers look for older workers? Here, the researchers turned to RetirementJobs.com, the only major job site for people 50 and older. The site includes both “direct” listings specifically aimed at older workers and “indirect” postings from employers looking to hire older as well as younger workers.

Focusing on all jobs posted on RetirementJobs.com, Table 1 shows that salaries for part-time and full-time jobs on RetirementJobs.com are significantly higher than typical job board jobs and for full-time. is more likely. Positions On the other hand, the most direct-purpose jobs for older workers tend to pay less.

Table showing comparison of job postings between RetirementJobs.com (all and direct) and a typical job board

Will the demand for older workers continue tomorrow?

This exercise involved two different approaches. The first task was simply to look at the tasks that older workers are doing today and compare them to projections for 2030. This analysis answers the question: Are older workers currently holding jobs that are expected to be plentiful at the end of the decade? The first approach yields a discouraging result – a higher share of older workers in an occupation today is associated with fewer jobs in 2030.

Another approach addressed a slightly different question: Are older workers Capable To do things that will be overwhelming in 2030, whatever they are. no Are you doing now? The finding here is somewhat encouraging: The jobs that older workers can do don’t seem to be disappearing, even as the jobs they’re doing seem to be becoming less common.

To summarize

Older workers can be just as good as younger workers for a firm’s bottom line. But employer perceptions appear to be mixed – they say older workers are at least as productive but relatively more expensive. In terms of the future, while the number of jobs older workers do today may decrease, the number of other jobs older workers are capable of doing should be greater. “There is room for hope in anger,” Geoff concludes. Pretty angry, I’d say.


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