Advertisement

Journal of Population Economics

, Volume 27, Issue 4, pp 1087–1106 | Cite as

Endogenous age discrimination

  • Christian MangerEmail author
Original Paper

Abstract

This paper shows that hiring discrimination against old workers occurs in imperfect labour markets even if individual productivity does not decrease with age and in the absence of a taste for discrimination. Search and informational frictions generate unemployment, with less productive workers facing higher risks of unemployment. Therefore, the employment status provides a signal for expected productivity. This stigma of unemployment becomes stronger with individual age and reduces the hiring opportunities of older workers. Political measures such as a reduction in dismissal protection can help to restore efficiency.

Keywords

Search frictions Age discrimination Unemployment 

JEL Classification

J14 J41 J71 

Notes

Acknowledgments

I am grateful to Leo Kaas, Carlos Alós–Ferrer, Friedrich Breyer, Stefan Zink and two anonymous referees for the numerous helpful comments and remarks.

References

  1. Aliprantis C, Camera G, Puzzello D (2007) A random matching theory. Games Econ Behav 59:1–16CrossRefGoogle Scholar
  2. Arrow KJ (1973) The theory of discrimination. In: Ashenfelter O, Rees A (eds) Discrimination in labor markets. Princeton University Press, Princeton, pp 3–33Google Scholar
  3. Becker GS (1957) The economics of discrimination. The University of Chicago Press, ChicagoGoogle Scholar
  4. Blankenau W, Camera G (2006) A simple economic theory of skill accumulation and schooling decisions. Rev Econ Dyn 9:93–115CrossRefGoogle Scholar
  5. Heywood JS, Ho L-S, Wei X (1999) The determinants of hiring older workers: evidence from Hong Kong. Ind Labor Relat Rev 52:444–459CrossRefGoogle Scholar
  6. Heywood JS, Jirjahn U, Tsertsvardze G (2010) Hiring older workers and employing older workers: German evidence. J Popul Econ 23:595–615CrossRefGoogle Scholar
  7. Hirsch BT, Macpherson DA, Hardy MA (2000) Occupational age structure and access for older workers. Ind Labor Relat Rev 53:401–418CrossRefGoogle Scholar
  8. Hutchens R (1986) Delayed payment contracts and a firm’s prospensity to hire older workers. J Labor Econ 4:439–457CrossRefGoogle Scholar
  9. Kugler AD, Saint-Paul G (2004) How do firing costs affect worker flows in a world with adverse selection?J Labor Econ 22(3):553–584CrossRefGoogle Scholar
  10. Lang K, Manove M, Dickens W (2005) Racial discrimination in labor markets with posted wage offers. Am Econ Rev 95:1327–1340CrossRefGoogle Scholar
  11. Lockwood B (1991) Information externalities in the labour market and the duration of unemployment. Rev Econ Stud 58:733–753CrossRefGoogle Scholar
  12. Oberholzer-Gee F (2008) Nonemployment stigma as rational herding: a field experiment. J Econ Behav Organ 65:30–40CrossRefGoogle Scholar
  13. Phelps ES (1972) The statistical theory of racism and sexism. Am Econ Rev 62:659–661Google Scholar
  14. Skirbekk V (2004) Age and individual productivity: a literature survey. In: Feichtinger G (ed) Vienna yearbook of population research. Verlag der Österreichischen Akademie der Wissenschaften, Vienna, pp 133–153Google Scholar

Copyright information

© Springer-Verlag Berlin Heidelberg 2013

Authors and Affiliations

  1. 1.Department of EconomicsUniversity of MannheimMannheimGermany

Personalised recommendations