Fewer than a quarter of workers age 50 and older who lost their jobs between mid-2008 and the end of 2009 found work within 12 months, a rate much lower than for younger workers in similar circumstances. What explains this? Is it age discrimination? Bias against time spent unemployed? Local labor market conditions? This grant supports efforts by three labor economists, Daniel Silverman of the University of Michigan, Henry Farber of Princeton, and Till von Wachter of Columbia, to partly answer these questions by conducting a unique experiment that may advance our understanding of how the prospects of older worker re-employment are affected by time unemployed, tightness of local labor markets, and differences in job history.
Silverman and the rest of the team will send out to employers some 12,000 pairs of job applications for a mythical unemployed older worker. The faux applications will be identical except for the length of time the applicant has been unemployed, and Silverman and his team will subsequently record the rate at which the applications receive a positive callback from employers, allowing them to estimate how the duration of unemployment affects the possibility of being re-hired. The team will field applications in a number of different labor markets, and will vary the job histories of applicants, which should yield additional insights into how labor market conditions and prior work experience affect the re-employment aspects of workers over 50.