Age Differences in Job Loss, Job Search, and Reemployment Richard W. Johnson and Corina Mommaerts Urban Institute 12 th Annual Joint Conference of the Retirement Research Consortium August 5, 2010
Research Objective: Compare Older Workers to Younger Workers • Likelihood of losing their jobs • Time to reemployment after job loss • Impact of job loss on characteristics of future jobs • Job search activities Urban Institute Program on Retirement Policy www.RetirementPolicy.org
Survey of Income and Program Participation (SIPP) • 1996, 2001, and 2004 panels • 2½- to 4-year follow-up period • Spans 1996 to 2007 • Respondents are interviewed every 4 months – monthly retrospective data collected at each interview Urban Institute Program on Retirement Policy www.RetirementPolicy.org
Job Loss Analysis • Person-month observations on wage and salary workers age 18+ – self-employed workers are excluded • Remain in the sample until they separate from the original employer • Lose job if separate from employer because of layoff, slack work, bankruptcy, employer sold firm • Estimate discrete-time hazard models of job loss – controls include demographics, job characteristics, job tenure, interactions with year and age Urban Institute Program on Retirement Policy www.RetirementPolicy.org
Cumulative Probability of Male Wage and Salary Workers Losing Their Jobs, by Age 10% 8% 18-24 6% 25-34 35-49 4% 50-61 62+ 2% 0% 0 6 12 18 24 30 36 42 Months Observed on the Job Urban Institute Program on Retirement Policy www.RetirementPolicy.org
Cumulative Probability of Female Wage and Salary Workers Losing Their Jobs, by Age 10% 8% 18-24 6% 25-34 35-49 4% 50-61 62+ 2% 0% 0 6 12 18 24 30 36 42 Months Observed on the Job Urban Institute Program on Retirement Policy www.RetirementPolicy.org
Age 50+ Workers Are Less Likely to Lose Their Jobs, but Only Because of Job Seniority Estimated Likelihood of Job Loss Relative to Workers Age 25-34, Men, by Presence of Controls 24% * 2% 50-61 62+ * -11% * * -21% -23% * -30% Year only +Demog, Job Chars +Tenure * p < .05 Urban Institute Program on Retirement Policy www.RetirementPolicy.org
Results Are Similar for Women Estimated Likelihood of Job Loss Relative to Workers Age 25-34, Women, by Presence of Controls 10% 6% 50-61 62+ * -13% * * -21% -23% * -30% Year only +Demog, Job Chars +Tenure * p < .05 Urban Institute Program on Retirement Policy www.RetirementPolicy.org
Other Job Loss Results • Job loss is more common among: – African Americans – Hispanics (women only) – those who didn’t finish high school (than grads) – those with fair or poor health – those working for small employers – part-time workers Urban Institute Program on Retirement Policy www.RetirementPolicy.org
More Job Loss Results • Job loss is less common: – for college grads (than high school grads) – union members (women only) – as wages increase – as length of service increases • Being age 50-61 increased job loss chances for men much more in 2001-2003 than earlier years Urban Institute Program on Retirement Policy www.RetirementPolicy.org
Research Objective: Compare Older Workers to Younger Workers • Likelihood of losing their jobs • Time to reemployment after job loss • Impact of job loss on characteristics of future jobs • Job search activities Urban Institute Program on Retirement Policy www.RetirementPolicy.org
Reemployment Analysis • Person-month observations on displaced wage and salary workers age 18+ • Enter the sample when we observe job loss • Remain in the sample until they become reemployed or drop out of labor force or survey • Estimate discrete-time hazard models of reemployment – controls include age, other demographics, year, characteristics of former job, economic status, receipt of UI benefits, no. of months unemployed Urban Institute Program on Retirement Policy www.RetirementPolicy.org
Cumulative Probability of Displaced Wage and Salary Workers Becoming Reemployed, by Age 100% 80% 18-24 60% 25-34 35-49 40% 50-61 62+ 20% 0% 0 6 12 18 24 Months Since Job Loss Urban Institute Program on Retirement Policy www.RetirementPolicy.org
The Chances of Becoming Reemployed Decline Steadily with Age Estimated Likelihood of Becoming Reemployed, Relative to Workers Age 25-34 -3% * 35-49 -10% * 50-61 -18% 62+ * -39% * * -50% -50% Men Women * p < .05 Urban Institute Program on Retirement Policy www.RetirementPolicy.org
Other Reemployment Results • Reemployment is less common: – for African Americans – for Hispanics – for those receiving UI benefits – as months since displacement increase • Holding other factors constant, there are no significant differences by education Urban Institute Program on Retirement Policy www.RetirementPolicy.org
Research Objective: Compare Older Workers to Younger Workers • Likelihood of losing their jobs • Time to reemployment after job loss • Impact of job loss on characteristics of future jobs • Job search activities Urban Institute Program on Retirement Policy www.RetirementPolicy.org
When Reemployed, 50+ Displaced Male Workers Experience Large Wage Losses Median Hourly Wage on Old and New Jobs for Displaced Male Workers Who Become Reemployed 18.9 16.7 16.0 16.0 15.1 4% 13.1 12.9 20% 10.3 36% Old New 25-34 35-49 50-61 62+ Urban Institute Program on Retirement Policy www.RetirementPolicy.org
Age Patterns of Wage Loss Are Less Consistent for Reemployed Displaced Women Median Hourly Wage on Old and New Jobs for Displaced Male Workers Who Become Reemployed 13.3 13.1 12.7 11.4 10.7 10.5 10% 9.0 18% 21% 7.6 16% Old New 25-34 35-49 50-61 62+ Urban Institute Program on Retirement Policy www.RetirementPolicy.org
Research Objective: Compare Older Workers to Younger Workers • Likelihood of losing their jobs • Time to reemployment after job loss • Impact of job loss on characteristics of future jobs • Job search activities Urban Institute Program on Retirement Policy www.RetirementPolicy.org
Exploration of Job Search Activities • Current Population Survey data • Respondents report various job search activities over the past four weeks • Pool data from March, April, May, and June surveys in 2010 Urban Institute Program on Retirement Policy www.RetirementPolicy.org
Percentage of Unemployed Workers Engaged in Various Job Search Activities Contact employer 77% Looked at ads 29% Contact friends/family 28% Contact public agency 20% Place or answer ad 16% Contact private agency 8% Check prof/union register 3% School employment center 3% Job training 1% Source: Authors’ computations from the March–June 2010, CPS Urban Institute Program on Retirement Policy www.RetirementPolicy.org
Percentage of Unemployed Workers Who Contacted Employer Directly 84% 79% 74% 72% 62% 18-24 25-34 35-49 50-61 62+ Source: Authors’ computations from the March–June 2010, CPS Urban Institute Program on Retirement Policy www.RetirementPolicy.org
Percentage of Unemployed Workers Who Contacted a Public Employment Agency 23% 21% 21% 16% 16% 18-24 25-34 35-49 50-61 62+ Source: Authors’ computations from the March–June 2010, CPS Urban Institute Program on Retirement Policy www.RetirementPolicy.org
Percentage of Unemployed Workers Who Contacted Friends or Relatives 31% 30% 30% 28% 24% 18-24 25-34 35-49 50-61 62+ Source: Authors’ computations from the March–June 2010, CPS Urban Institute Program on Retirement Policy www.RetirementPolicy.org
Mean Number of Job Search Methods Used by Unemployed Workers 2.0 2.0 2.0 1.9 1.7 18-24 25-34 35-49 50-61 62+ Source: Authors’ computations from the March–June 2010, CPS Urban Institute Program on Retirement Policy www.RetirementPolicy.org
Summary • Workers age 50+ are less likely than younger workers to loss their jobs, but only because of their longer years of service with the employer • When workers age 50+ lose their jobs, it takes them longer than younger workers to become reemployed • When displaced men age 50+ find work, they suffer greater wage losses than younger men • Unemployed workers age 50-61 appear to search for work as actively as younger workers Urban Institute Program on Retirement Policy www.RetirementPolicy.org
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