Breakfast Session: The Status of Older Workers and the Older Worker Labor Market
Friday, Jan. 3, 2020 8:00 AM - 10:00 AM (PDT)
- Chair: Anthony Webb, New School for Social Research
Pension Reforms and Their Implications for Establishment Downsizing
AbstractWhile the empirical literature on the effects of pension reform on workers is broad, less is known about the impact on employers. Yet reforms that create incentives to postpone retirement may have extensive effects on employer labor demand and labor costs, especially in settings where there are strict legal protections against age discrimination in employment. Although public pension system reforms generally are structured to treat all workers within the same birth cohort similarly, the impact on employers may vary substantially due to differences in the age composition of their employees. Using this variation as a source of identification, we examine whether the differential impact of pension reform leads to differences in the incidence of workforce downsizing, a sign of possible financial distress. To ensure estimates are not biased due to attrition, we also model associations between the impact of pension reform and establishment closures and find no association. Results for downsizing consistently show establishments with a higher share of older workers are more likely to experience downsizing. When we segment workers within establishments by age, the absolute changes in downsizing probabilities are highest for younger workers. Preliminary results indicate works councils may increase the risk of downsizing for older workers and protect employment for young and prime workers.
Why American Older Workers Have Lost Bargaining Power
AbstractBargaining power is not measured directly but inferred from labor market outcomes. Eight major factors suppress older workers’ bargaining power: rise of alternative work schedules and loss of internal labor markets; relative union loss; employment by smaller firms; persistent age discrimination; geographical immobility; wage cohort effects; eroding retirement income security. And older workers’ ineligibility for the Earned Income Tax Credit (EITC). Since workers over age 55 are projected to fill 6.4 million of the 11.4 million net new jobs created between 2016 and 2026 their bargaining power loss could suppress wages and working conditions for all workers.
- J2 - Demand and Supply of Labor