Who hires older workers? A first look at industry variations in the recruitment of mature workers

Who hires older workers? A first look at industry …
01 Mar 2009

This research note is concerned with age structure variations in firms’ hiring patterns. It uses data from the Linked Employer-Employee Dataset (LEED) to document variations in the recruitment of older workers across industries, in the 2004/05 to 2006/07 period. It was motivated by concerns that the range of job opportunities that are open to job seekers aged 55 years and over may be more limited than for younger or prime-aged job seekers.

The paper defines ‘older’ as persons aged 55–74 years. It distinguishes ‘new hires’ (newly recruited employees who did not work for the firm in the previous two years) from ‘rehires’ (people who were re-employed by a firm after a gap of up to two years), and focuses largely on the former.

For each industry, the paper provides measures of the proportion of employees in the workforce who were older, the proportion of new hires who were older, and the ratio of the two, also known as the Hutchens index of hiring opportunity. The Hutchens index has been used to identify firms, occupations, or industries where older workers are under-represented in recruitment intakes, suggesting the possible existence of recruitment barriers.

Across industries, we find a strong positive correlation between the proportion of existing employees who were older and the proportion of new hires who were older. In other words, industries that employ a high/low proportion of older workers tend to recruit a similar proportion of older workers within their new employee intakes.

However, some variations do exist. The industries that recruited a low fraction of older workers relative to the fraction of their existing workers in this age group (leading to a low value of the Hutchens index), included many of the manufacturing industries, forestry and logging, food and beverage services, library and other information services, broadcasting, sport and recreation activities, air transport, and telecommunication services. While most of these industries are small, food and beverage services is a substantial employer.

The information in LEED does not allow us to tell whether low values of the Hutchens index are due to recruitment barriers faced by older job seekers, or to other factors. Alternative explanations for low values of the Hutchens index are discussed in the paper.

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