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Graying and Staying on the Job: The Welfare Implications of Employment Protection for Older Workers

Author

Listed:
  • Morris, Todd

    (University of Queensland)

  • Dostie, Benoit

    (HEC Montreal)

Abstract
We study the welfare implications of employment protection for older workers, exploiting recent bans on mandatory retirement across Canadian provinces. Using linked employer- employee 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.

Suggested Citation

  • Morris, Todd & Dostie, Benoit, 2023. "Graying and Staying on the Job: The Welfare Implications of Employment Protection for Older Workers," IZA Discussion Papers 16430, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp16430
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    Cited by:

    1. Pawel Chrostek & Krzysztof Karbownik & Michal Myck, 2024. "Labor Market Externalities of Pre-Retirement Employment Protection," CESifo Working Paper Series 11078, CESifo.

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    More about this item

    Keywords

    employment protection; retirement; welfare; active and passive savings responses; health effects; spousal spillovers;
    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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