Endogenous age discrimination

Manger, Christian
October 2014
Journal of Population Economics;Oct2014, Vol. 27 Issue 4, p1087
Academic Journal
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.


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