What Makes Older Job-Seekers Attractive to Employers?

Arjan Heyma (), Siemen Werff (), Aukje Nauta and Guurtje Sloten

De Economist, 2014, vol. 162, issue 4, 397-414

Abstract: Using a conjoint analysis with an hypothetical hiring process, in which managers chose repeatedly between two hypothetical candidates for a relevant vacancy, our study confirms that hiring probabilities decline with age, particularly after the age of 58. Several theoretical arguments are given for this, both from the economic and psychological literature. Estimation results point at three important mechanisms that may explain declining hiring probabilities with age: (1) Uncertainty about productivity levels of older job-seekers may cause risk averse employers to chose younger job-seekers with lower, but more certain productivity levels. All factors and policy measures that are informative about productivity levels and reduce uncertainty for employers, also increase the average hiring probability for older job-seekers. (2) Increasing labour costs compared to steady or declining productivity levels of older workers. Some of these costs are determined on a national level, but many are negotiated between employers and employees in central bargaining agreements. Employers themselves therefore have an important key to increase the attractiveness of older job-seekers. (3) Older managers hire more older job-seekers, the same is true for employers with an older workforce. It means that in an ageing society, the hiring probability of older job-seekers will increase, even if no additional policy measures are taken. The effect of this ageing is stronger than any of the policy measures analysed in our study. Copyright Springer Science+Business Media New York 2014

Keywords: Older workers; Ageing; Labour demand; Conjoint analysis; J14; J23; J18 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (8)

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DOI: 10.1007/s10645-014-9239-3

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