Age Discrimination Laws Didn't Help Older Workers in Fed Study

Older workers in states with tougher laws against age discrimination faced longer periods of unemployment after the 2007-2009 recession compared with younger workers, according to a Federal Reserve study.

“These results provide very little evidence that stronger state age discrimination protections helped older workers weather the Great Recession,” David Neumark and Patrick Button wrote in a research note published today by the San Francisco Fed. “In fact, the opposite may have occurred, with older workers bearing more of the brunt of the Great Recession in states with stronger age discrimination protections.”

Older workers have had an especially hard time finding work even with recent improvements in the job market, with the average duration of joblessness for 55 to 64 year-olds at 49 weeks in March. That was almost double that of 20-24 year-olds, according to Labor Department figures released last week.

“An event like the Great Recession disrupts the labor market so severely that sorting out which effects are due to age discrimination and which to worsening business conditions becomes very difficult,” Neumark and Button said. “These complications may make it hard to demonstrate age discrimination, reducing the likelihood that the legal system can intervene effectively and fairly.”

In the years before the most recent downturn, age discrimination laws did succeed in reducing unemployment durations for men, and improved hiring rates for both men and women, Neumark and Button said. That suggests the impact of the laws varied depending on the strength of the economy, they said.

“State age discrimination laws may need to be modified to strengthen protections during downturns,” they said. Neumark is a visiting scholar at the San Francisco Fed and professor of economics at the University of California at Irvine, where Button is a Ph.D. candidate.

To contact the reporter on this story: Aki Ito in San Francisco at aito16@bloomberg.net

To contact the editors responsible for this story: Chris Wellisz at cwellisz@bloomberg.net Brendan Murray, James L Tyson

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