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Did age discrimination protections help older workers weather the Great Recession? (Nuemark & Button 2014)

Absence of conflict of interest.

Citation

Neumark, D., & Button, P. (2014). Did age discrimination protections help older workers weather the Great Recession? Journal of Policy Analysis and Management, 33(4), 566-601. doi:10.1002/pam.21762

Highlights

  • The study examined whether the strong age discrimination laws moderated the impact of the Great Recession on employment outcomes of older workers.
  • The study used statistical models and the data from the 2003–2011 Current Population Survey (CPS) and 2004–2011 Quarterly Workforce Indicators to estimate impacts.
  • The study found that states with stronger age discrimination laws had experienced increases in unemployment rates, longer unemployment durations, and decreases in hiring rates for some types of older workers relative to younger workers in the months during and following the Great Recession.
  • The quality of causal evidence presented in this study is moderate because it was based on a well-implemented nonexperimental design. This means we are somewhat confident that the estimated effects are attributable to the differential effect of the Great Recession on older workers in states with strong age discrimination laws, but other factors might also have contributed.

Intervention Examined

Age Discrimination Laws

Features of the Study

The study used statistical models (difference-in-difference-in-differences [DDD] models) to examine the differential impact of the Great Recession on employment outcomes of older workers in states with strong and weak age discrimination laws relative to those of younger workers. The authors distinguished between states that adhere only to the federal Age Discrimination in Employment Act (ADEA) standards versus states that have stronger age discrimination based on the following two features: whether they have a lower firm-size minimum, and thus cover more employees; and whether they allow for larger financial damages. The study grouped workers into two age groups: younger workers ages 25 to 44, and older workers 55 and older. Study outcomes included unemployment rates, employment-to-population ratios, median unemployment durations, and hiring rates by state, gender, age, and time period. The DDD models control for unemployment insurance benefits available and the industry-age composition of the labor market by state. The authors demonstrated that trends in unemployment were similar across all groups in the five years preceding the Great Recession.

Findings

Employment

  • The authors found that after the Great Recession, older men had a 1 percentage point increase in unemployment rates compared to younger men in states with age discrimination laws allowing for larger financial damages than the federal ADEA relative to states with weaker age discrimination laws.
  • After the Great Recession, states with age discrimination laws that have a lower firm-size minimums experienced a 1.5 percentage point decrease in the employment-to-population ratios for older women relative to younger women in states with weaker age discrimination laws.
  • The authors found that median unemployment duration increased more for older men than for younger men in states with age discrimination laws allowing for larger financial damages both during (by 5.5 weeks) and after (by 5 weeks) the Great Recession compared to states with weaker age discrimination laws.
  • Older women in states with age discrimination laws allowing for larger financial damages had a decreased likelihood of being hired relative to younger women (by 1 percentage point) in states with weaker age discrimination laws during the period following the Great Recession.

Considerations for Interpreting the Findings

The authors of the study estimated multiple related impacts on outcomes related to employment. Performing multiple statistical tests on related outcomes makes it more likely that some impacts will be found statistically significant purely by chance and not because they reflect program effectiveness. The authors did not perform statistical adjustments to account for the multiple tests, so the number of statistically significant findings in these domains is likely to be overstated.

The study defined the younger workers group as ages 25 to 44. However, adults older than 40 are protected by ADEA, and some younger adults are protected on a state-by-state basis. Therefore, the effects of state age discrimination laws might apply to both the older and the younger workers in this study.

Causal Evidence Rating

The quality of causal evidence presented in this report is moderate because it was based on a well-implemented nonexperimental design. This means we are somewhat confident that the estimated effects are attributable to the differential effect of the Great Recession on older workers in states with strong age discrimination laws, but other factors might also have contributed.

Reviewed by CLEAR

September 2019

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