Template-Type: ReDIF-Paper 1.0
Title: Longer careers: A barrier to hiring and coworker advancement?
Author-Name: Irene Ferrari
Author-Name: Jan Kabátek
Author-Name: Todd Morris
Creation-date: 2023
Abstract: Government policies are encouraging older workers to delay retirement, which may curb younger workers’ career advancement. We study a Dutch reform that raised the retirement age by 13 months and nearly tripled employment at age 66. Using monthly linked employer-employee data, we show that affected firms delay and decrease replacement hiring, and coworkers’ earnings fall via reductions in hours worked, wages, and promotions. Combined, the hiring and coworker spillovers offset most of the additional hours worked by older workers, disproportionately affect career advancement for younger workers and women, and considerably increase the policy’s ratio of welfare costs to fiscal savings.
Classification-JEL: H55, J23, J26, J63
Keywords: retirement reform; labor demand; internal labor markets; firms; coworker spillovers
File-URL: https://ire.hec.ca/wp-content/uploads/2023/04/cahier_IRE_14_longer_careers_barrier_hiring_coworker_advancement.pdf
File-Size: 1900
Handle: RePEc:rsi:irersi:14