January, 2011As tales of the Great Recession of 2007â??2009 and its aftermath are told, many older workers may well recount their experiences with relief. But others will likely express only regret.
Workers age 50 and older were less likely than their younger coworkers to lose their jobs but took longer to find work when they became unemployed, and many accepted deep pay cuts, the Urban Institute’s Richard Johnson and Janice Park explain in “Can Unemployed Older Workers Find Work?”
Workers age 50 to 61 employed in the second half of 2008 stood a 6.1 percent chance of losing their jobs within 16 months, compared with 9.3 percent for those age 25 to 34 -- a 34 percent advantage.
Between mid-2008 and the end of 2009, the likelihood of finding a new job within 12 months was only 18 percent for laid-off workers 62 and older, half the 36 percent rate registered by workers 25 to 34. For workers 50 to 61, the reemployment rate was 24 percent.
These findings are based on the authors’ analysis of a nationally representative Census Bureau survey that has been tracking American households since September 2008.
In a companion report, “Age Differences in Job Loss, Job Search, and Reemployment,” Johnson and Corina Mommaerts show that, in the decade ending in 2007, age often shielded workers from layoff because older workers generally had more seniority than their younger counterparts. However, men age 50 to 61 who had the same service record as men age 25 to 34 were 24 percent more likely to lose their jobs. Older women were just as likely to lose their jobs as younger women with similar job tenure.
Johnson and Mommaerts also find that displaced men age 50 to 61 who found new jobs between 1996 and 2007 typically took a 20 percent hit to their hourly wages. Their counterparts 62 and older suffered a 36 percent falloff, while median wages fell only 4 percent for reemployed men age 35 to 49 and 2 percent for those 25 to 34. Older displaced women had sizeable wage losses, but not as dramatic as those for men. (Interestingly, displaced men and women 18 to 24 earned 2 to 7 percent more at their new jobs than their old ones.)
“Not only can job loss have devastating consequences in the short run, but it also upends retirement savings, especially for older workers,” says Johnson, who directs the Urban Institute’s Program on Retirement Policy. “Their financial security hinges on a solid employment record right up to retirement.”
About half of all displaced workers between 1996 and 2007 moved into a new occupation or new industry when they landed another job. Overall, only 4.4 percent of men and 3.2 percent of women transitioned to self-employment.
“Can Unemployed Older Workers Find Work?” was funded by the Rockefeller Foundation. “Age Differences in Job Loss, Job Search, and Reemployment” was supported by the Center for Retirement Research at Boston College through a grant from the U.S. Social Security Administration.
The Urban Institute is a nonprofit, nonpartisan policy research and educational organization that examines the social, economic, and governance challenges facing the nation. It provides information, analyses, and perspectives to public and private decisionmakers to help them address these problems and strives to deepen citizens’ understanding of the issues and trade-offs that policymakers face.