Aging and the labor market
Massachusetts Institute of Technology. Dept. of Economics.
Dora L. Costa.
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This thesis is a collection of three essays analyzing the interplay between aging and the labor market. The first chapter demonstrates that differential treatment by age exists in labor markets and explores different possible explanations for this differential treatment. As the baby boom cohort reaches retirement age, demographic pressures on public programs such as social security may cause policy makers to cut benefits and encourage work at later ages. This chapter reports on a labor market experiment to determine the hiring conditions for older women in entry-level jobs in Boston, MA and St. Petersburg, FL. I find differential interviewing by age for these jobs. A younger worker is more than 40% more likely to be offered an interview than an older worker. I find no evidence to support taste-based discrimination as a reason for this differential and some evidence to support statistical discrimination. The second chapter examines more closely one of the possible reason for this differential treatment. Older workers may cost employers more in terms of potential age discrimination lawsuits. I study the effects of state and federal age discrimination laws between 1968 and 1991. Prior to the enforcement of the federal law, state laws had little effect on older workers, suggesting that firms either knew little about these laws or did not see them as a threat. After the enforcement of the federal Age Discrimination in Employment Act (ADEA) in 1979, white male workers over the age of 50 in states with age discrimination laws work fewer weeks per year and are less likely to be hired or separated from their jobs, but are more likely to be retired (perhaps involuntarily).(cont.) These findings suggest a story in which firms do not wish to hire older workers, are afraid to fire older workers, and remove older workers through strong incentives to retire in states where lawsuits are less of a hurdle for the worker. The third paper, co-authored with Melissa Boyle, explores the relationship between health insurance coverage and labor market efficiencies termed "job-lock." We exploit an insurance option which is bth truly exogenous to work decisions, and of lasting duration. A major expansion in both the services provided and the population covered by the Department of Veterans Affairs health care system allows us to both cleanly estimate the extent of job-lock, and also to study the impact of publicly provided health care on labor supply. Using data from the Current Population Survey, we examine the impact of health care coverage on labor force participation and retirement by comparing veterans and non-veterans before and after the VA expansion. Results indicate that workers are significantly more likely to cease working as a result of becoming eligible for public insurance, and are also more likely to move to part-time work.
Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2005."June 2005." Page 111 blank.Includes bibliographical references.
DepartmentMassachusetts Institute of Technology. Dept. of Economics.
Massachusetts Institute of Technology