Longer Careers: A Barrier to Hiring and Coworker Advancement?

Irene Ferrari, Jan Kabátek and Todd Morris

No 16098, IZA Discussion Papers from Institute of Labor Economics (IZA)

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.

Keywords: retirement reform; labor demand; internal labor markets; firms; coworker spillovers (search for similar items in EconPapers)
JEL-codes: H55 J23 J26 J63 (search for similar items in EconPapers)
Pages: 78 pages
Date: 2023-04
New Economics Papers: this item is included in nep-age, nep-eur, nep-hrm and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Longer careers: A barrier to hiring and coworker advancement? (2023)
Working Paper: Longer careers: A barrier to hiring and coworker advancement? (2023)
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