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Graying and staying on the job: The welfare implications of employment protection for older workers

Author

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  • Todd Morris
  • Benoit Dostie
Abstract
We study the welfare implications of employment protection for older workers, exploiting recent bans on mandatory retirement across Canadian provinces. Using linked employeremployee tax data, we show that the bans cause large and similar reductions in job separation rates and retirement hazards at age 65, with further reductions at higher ages. The effects vary substantially across industries and firms, and around two-fifths of the adjustments occur between ban announcement and implementation dates. We find no evidence that the demand for older workers falls, but the welfare effects are mediated by spillovers on savings behavior, workplace injuries, and spousal retirement timing. Nous étudions les répercussions de la protection de l’emploi sur le bien-être des travailleurs âgés, en exploitant les récentes interdictions de la retraite obligatoire dans les provinces canadiennes. À l’aide de données fiscales couplées sur les employés et les employeurs, nous montrons que les interdictions entraînent des réductions importantes et similaires aux taux de cessation d’emploi et des risques de retraite à l’âge de 65 ans, et d’autres réductions à des âges plus élevés. Les effets varient considérablement d’une industrie et d’une entreprise à l’autre, et environ les deux cinquièmes des ajustements surviennent entre l’annonce de l’interdiction et les dates de mise en œuvre. Nous ne trouvons aucune preuve que la demande de travailleurs âgés diminue, mais les effets sur le bien-être sont atténués par les retombées sur le comportement d’épargne, les blessures en milieu de travail et le moment où le conjoint prend sa retraite.

Suggested Citation

  • Todd Morris & Benoit Dostie, 2023. "Graying and staying on the job: The welfare implications of employment protection for older workers," CIRANO Working Papers 2023s-20, CIRANO.
    • Handle: RePEc:cir:cirwor:2023s-20
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    File URL: https://cirano.qc.ca/files/publications/2023s-20.pdf
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    Cited by:

    1. Paweł Chrostek & Krzysztof Karbownik & Michał Myck, 2024. "Labor Market Externalities of Pre-retirement Employment Protection," NBER Working Papers 32371, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

    employment protection; retirement; welfare; active and passive savings responses; health effects; spousal spillovers; protection de l’emploi; retraite; bien-être social; épargne active et passive; effets sur la santé; retombées pour le conjoint;
    All these keywords.

    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J78 - Labor and Demographic Economics - - Labor Discrimination - - - Public Policy (including comparable worth)
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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