Employment after fifty-five, two distinct problems

The employment rate of those aged fifty-five to sixty-four has risen markedly since the early 2000s, driven mainly by later retirement ages and the closure of early retirement schemes.

At the same time, the average time taken to return to work after losing a job remains markedly longer for that age group than for others. The two findings are compatible and describe different situations.

The first concerns people already in work, whom the reforms lead to stay there longer. The second concerns those who have lost their job and are looking for another. A policy can improve one without touching the other.

Pushing back age thresholds lengthens a period in which people are neither in work nor retired, and fall under unemployment, sickness or disability.

Studies following individual trajectories find a substantial share of people no longer in employment several years before drawing their pension, a situation barely visible in aggregate indicators. The cost of that period is partly shifted onto other branches of social protection, something evaluations of pension reforms need to take into account.

Experiments sending fictitious applications identical except for age, conducted in several countries, find a response rate that falls with the candidate's age.

Those protocols measure access to an interview rather than the final decision, but they isolate a difference in treatment between identical applications, which self-report surveys cannot do.

Building them raises a difficulty specific to age: an older candidate has, in principle, more experience. Making two applications identical therefore means either giving an older candidate short experience or giving a younger one long experience, and each of those choices is open to debate.

Economic explanations turn on pay costs that rise with seniority, on the period over which a hire is amortised and on training costs. They fit audit study results poorly, since post and pay are identical there. Edward Lazear proposed in 1979 a reading of careers in which pay falls below productivity early on and exceeds it towards the end. The model mainly sheds light on the employer's incentives towards employees already in post.

Explanations through representations, tested by questionnaires among recruiters, find beliefs about adaptability and health that do not correspond to measured differences in performance.

Schemes encouraging the hiring of older workers have been evaluated in several countries, generally with weak effects on hiring and documented deadweight effects, part of the subsidised recruitment having happened anyway.

Schemes acting on working conditions and arduous work are less evaluated but target a different mechanism, keeping people in work rather than bringing them back to it.