Research: Why Hiring Rates of Older Workers Vary among Industries

The decision to remain in the workforce or fully retire is typically made between the ages of 55 and 64 and is predicated on many factors, including the availability of suitable jobs. In a paper published in Research on Aging, Geri Adler and Don Hilber explore the extent to which members of this age group are being hired by different industries and developed a model isolating what types of factors best determine relative hiring rates: those specific to an industry, a labor market, the older worker age group, or some combination thereof.

In their article ("Industry Hiring Patterns of Older Workers"), the authors estimate a low rate of new hiring for older workers aged 55 to 64 years, with low turnover and net outflows but substantial variability among industries. The findings additionally suggest that current national industry job growth and pay differentials among older new hires, existing older workers, and other new hires have the greatest bearing on how much these net flows vary by industry within states. Implications for older workers, their prospective employers, and policy makers are discussed.

Source: Research on Aging Abstract Vol 31, Issue 1 (2009)

Kansas: Census Bureau Issues Profile of the Older Worker

In a continuation of its partnership with 31 states on a series of reports on workers 55 and older, the Census Bureau has released its report on Kansas, the 27th state to be released in the series. Among the highlights of the report--"The Geographic Distribution and Characteristics of Older Workers in Kansas: 2004":

• 14.4% of workers were 55 and older, while 3.5% were 65 and older;
• statewide, the real estate and rental and leasing industry had the highest proportion of or workers 55 and older, but no industry had 20% or more of its workers in that age group; and
• the state's manufacturing industry employed the greatest number of older workers, with about 18.0% of the workers 55 and older being in that sector.

Source: U.S. Census Bureau Longitudinal Employer-Household Dynamics What's New (December 23, 2008)

West Virginia: Census Bureau Issues Profile of the Older Worker

In a continuation of its partnership with 31 states on a series of reports on workers 55 and older, the Census Bureau has released its report on West Virginia, the 26th state to be released in the series. Among the highlights of the report--"The Geographic Distribution and Characteristics of Older Workers in West Virginia: 2004":

• 13.8% of workers were 55 and older, while 2.7% were 65 and older;
• statewide, other sevices (except public administration) had the highest proportion of workers in that age group, but no industry had 20% or more; and
• the state's health care and social assistance industry employed the greatest number of older workers, with about 18.8% of the workers 55 and older being in that sector.

Source: U.S. Census Bureau Longitudinal Employer-Household Dynamics What's New (December 17, 2008)

Survey: Employers Look for More Changes in Retiree Medical Benefits

The International Society of Certified Employee Benefit Specialists has released a survey about providing medical benefits for pre-65 and post-65 retirees that finds that employers are struggling to balance conflicting objectives in responding to organizational cost pressures, rapidly rising retiree contributions, administrative challenges, and the transition of older workers into retirement. "In the absence of a panacea, employers are examining ways in which current market offerings can be designed and deployed to help 'change the deal' with employees and retirees without undermining workforce management initiatives or inciting undue employee or retiree unrest."

Conducted with Towers Perrin, the survey--"Employers Are Poised To Take Action On Retiree Medical Plans"--reports that while the long-term trend toward employer exit is clear, with only 39% of employers offering retiree medical to new hires, over 70% of respondents still offer retiree medical to current retirees and some portion of their current active population. While only 7% of employers have ceased financial support for pre-65 coverage in the past two years, 42% have either changed or plan to change the cost-sharing deal between company and retiree. For post-65 retirees, 60% have capped their subsidy report plan costs in excess of the cap, almost 40% have or will recast cost-sharing terms with post-65 retirees, and almost 20% have ceased--or plan to cease--providing any post-65 financial support at all.

Source: International Society of Certified Employee Benefit Specialists Press Release (December 18, 2008)

Australia: Government Acts To Encourage Small Businesses To Retain Older Workers

Australia's Department of Consumer and Employment Protection and the Small Business Development Corporation have engaged in a process to encourage Western Australian business to employ mature age workers as a way to improve performance and boost the bottom line. Through publication of "Don’t rule out mature age workers," will help small employers struggling to compete with large enterprises for skilled labor.

See also the Department of Commerce site Mature age employment for other information for employers and employees.

Source: Department of Consumer Media Statement (December 16, 2008)

United Kingdom: Government Reports on Flexible Retirement, Seeks More Comments

The United Kingdom's Department for Work and Pensions (DWP) has released the results of its consultation on flexible retirement and, in turn, has announced a new consultation to explore this issue further. According to DWP, the "most obvious conclusion from this exercise" is that the age discrimination regulations "continue to cause some unease and uncertainty for employers, trustees, professional advisers, members and their representatives alike."

According to DWP, the age rules were intended to combat the worst aspects of discrimination, and "it would be counterproductive to introduce a regulatory regime that subverted the Government’s wider policy of ensuring that older people have opportunities to carry on working and earning towards retirement." Accordingly, DWP wants to promote fairness, not set impossible standards. Thus, DWP now seeks "to consult on alternative options for a further exemption in respect of flexible retirement arrangements to mitigate any disincentive effect." Specifically, DWP is asking, among other things:

Question 1: The definition of ‘flexible retirement’ excludes members continuing in the same grade with the same hours, but who take all or part of their age-related benefits. Do you (or employers or schemes you advise) enable workers to continue to work after NPA in the same grade and with the same hours whilst taking their age related benefits? If so, does the practice cause significant problems for the scheme and are you (or any of the employers or schemes you advise) considering withdrawing the policy? If not, please explain why the practice has not been adopted.

Question 4: We welcome further evidence to determine the extent to which the Age Regulations deter employers from offering flexible retirement arrangements. Do you (or the employers or schemes you advise) currently provide flexible retirement arrangements to staff? If so, are you (or the employers or schemes you advise) considering withdrawing or limiting those arrangements? Why? If you (or the employers or schemes you advise) do not offer flexible retirement arrangements, what is the reason for this? Would an exemption from the Age Regulations lead you (or the employers or schemes you advise) to change your current practice?

Sources: Department for Work and Pensions "Flexible Retirement and Pension Provision" (December 16, 2008); Professional Pensions "DWP launches age discrimination consultation" (December 17, 2008)

France: Website for Employers and Employees to Manage Second Half of Careers

In order to help with the retention of employees in the second part of their careers--a major economic and social priority anticipated by employers and employees, Opcalia has launched Fifti, a website for professional and public use to change the social perceptions and changing attitudes of managers and employees as France seeks to raise the number of employees over 55 to 50% by 2010.

Fifti aims to help employees and employers to understand and anticipate the issue of age in the company. By combining the needs and expectations, raising fears and misconceptions, Fifti can open dialogue to understand different parts of the second careers and to implement new practices. Among other things, the website will address skills, training, preparation for retirement, motivation, nutrition, and physical activity of older workers.

Source: Opcalia Press Release (December 12, 2008)

Idaho: Census Bureau Issues Profile of the Older Worker

In a continuation of its partnership with 31 states on a series of reports on workers 55 and older, the Census Bureau has released its report on Idaho, the 25th state to be released in the series. Among the highlights of the report--"The Geographic Distribution and Characteristics of Older Workers in Idaho: 2004":

• 12.9% of workers were 55 and older, while 2.7% were 65 and older;
• statewide, the utilities industry had the highest proportion of or workers 55 and older, with 22.0% or more of its workers in that age group, followed by transportation and warehousing, with 21.2% in that age group; and
• the state's retail trade industry employed the greatest number of older workers, with about 15.0% of the workers 55 and older being in that sector.

Source: U.S. Census Bureau Longitudinal Employer-Household Dynamics What's New (December 10, 2008)

Research: Effect of Older Worker Unemployment Protection on Employment

Faced with low employment rates for older workers, most OECD countries
have experimented with specific older worker employment protection in the
form of taxes on firing and subsidies on hiring. A paper issued by the Institute for the Study of Labor examines the age-related design of firing taxes by extending the theory of job creation and job destruction to account for a finite working life-time.

Arnaud Chéron, Jean-Olivier Hairault, and François Langot, the authors of "Age-Dependent Employment Protection," argue that the potential employment gains related to employment protection are high for older workers, but higher firing taxes for these workers increase job destruction rates for the younger generations. On the other hand, age-decreasing firing taxes can lead to lower job destruction rates at all ages. Furthermore, because firings of older (younger) workers exert a negative (positive) externality on the matching process, the authors find that the first best age-dynamic of firing taxes and hiring subsidies is typically hump-shaped. Taking into account distortions related to unemployment benefits and bargaining power shows the robustness of this result, in contradiction with the existing policies in most OECD countries.

Source: Institute for the Study of Labor Abstract (November 2008)

North Dakota: Census Bureau Issues Profile of the Older Worker

In a continuation of its partnership with 31 states on a series of reports on workers 55 and older, the Census Bureau has released its report on North Dakota, the 24th state to be released in the series. Among the highlights of the report--"The Geographic Distribution and Characteristics of Older Workers in North Dakota: 2004":

• 13.6% of workers were 55 and older, while 3.3% were 65 and older;
• statewide, the real estate and rental and leasing industry had the highest proportion of or workers 55 and older, with 22.0% of its workers in that age group; and
• the state's health care and social assistance industry employed the greatest number of older workers, with about 21.6% of the workers 55 and older being in that sector.

Source: U.S. Census Bureau Longitudinal Employer-Household Dynamics What's New (November 25, 2008)

Research Study Pushes for Cultural Changes To Increase Workplace Flexibility for Older Workers

An AARP Public Policy Institute Insight on the Issues report focuses on the availability of and barriers to flexible work options, with a particular focus on older workers and phased retirement. According to the Making Work More Flexible: Opportunities and Evidence, prepared by Melissa A. Hardy of The Pennsylvania State University, many employers remain skeptical of flexible work options, despite growing evidence that they can benefit both employers and employees. Among other things, these employers fear that labor costs, output, or administrative efficiency will be unfavorably affected.

Among other things, the report looks at phased retirement, finding that while older workers express considerable interest in scaling back their work hours prior to full retirement, and many analysts and older worker advocates contend that such work options could prolong working life, relatively few workers have access to formal phased retirement options.

Source: AARP Research Report (November 2008)