Age Discrimination in Employment Act and population aging challenges

The U.S. Age Discrimination in Employment Act (ADEA) of 1967 prohibits bias against those 40 and older. Because the share of the aging population in the U.S. is expected to rise, the act’s role in maintaining and encouraging employment of older workers is likely to grow in importance.

A 2008 University of California at Irvine study done for the National Bureau of Economic Research, “The Age Discrimination in Employment Act and the Challenge of Population Aging,” gives an overview of age discrimination in the U.S. labor market and the ADEA’s historical effects.

The paper’s findings include:

• Age discrimination laws have boosted the employment of older workers.
• The enforcement of the ADEA has focused on terminations more than hiring.
• There is no evidence that the act increased the hiring of older workers. In addition, the act possibly reduced such hiring because it increased the cost of terminating older workers.
• There is mixed evidence on the effects of the act’s ban on mandatory retirement.
• The ADEA strengthened long-term employment relationships by reducing the incentives for firms to terminate older employees.

Tags: aging, employment, retirement