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Reassessing the Age Discrimination in Employment Act

The Age Discrimination in Employment Act (ADEA) became law in 1967. The original Act prohibited discrimination on the basis of age for persons age 40-65; subsequent amendments raised the upper age limit to 70 in 1978 and eliminated it altogether in 1986. A great deal of research has focused on assessing the effectiveness of the ADEA in combating age discrimination in the labor market in decades past. In the future the challenges that need to be met by the ADEA may change in fundamental ways because of the aging of the population. The ADEA has the potential to encourage the continued employment of older Americans who desire to keep working, and conversely, to discourage discriminatory behavior that might reduce the employment of these individuals.

This AARP Public Policy Institute report by David Neumark of the University of California at Irvine reviews the existing research on age discrimination in employment and assesses how successful the ADEA has been in achieving its goals, along with how well it might support the continued employment of older adults in the future. Given that ADEA enforcement has tended to focus on terminations, which typically arise in cases of layoffs or “reductions-in-force,” the ADEA’s impact in recent years has been more on the continued employment of those under age 65. If age discrimination plays any role in suppressing the employment of those older than age 65, then figuring out how the ADEA can contribute to rooting out discrimination against these older individuals becomes of prime policy importance.

Looking forward, the share of the population age 65 and over will increase in coming decades, and many older workers will leave their longer-term career employment and move into part-time or shorter-term “bridge” jobs. As a consequence, potential problems stemming from age discrimination in hiring may become more important than they have been in past decades. The evidence on both the enforcement and the effectiveness of the ADEA suggests that the ADEA may be relatively ineffective with regard to the hiring of older workers. There may be limitations on how well the regulatory and legal systems address discrimination in hiring, and it would be useful to consider whether this effectiveness can be increased. On the other hand, in crafting any policy changes intended to boost the hiring of older workers, it is important to be mindful of the underlying economic barriers to this hiring and to try to focus on rooting out only the discriminatory behavior. (53 pages)

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