DP15760 Age Discrimination across the Business Cycle

Author(s): Gordon Dahl, Matthew Knepper
Publication Date: February 2021
Keyword(s): age discrimination, Recessions
JEL(s): J23, J64, J71
Programme Areas: Labour Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=15760

We test whether age discrimination rises during recessions using two complementary analyses. EEOC microdata reveal that age-related firing and hiring charges rise by 3.4% and 1.4%, respectively, for each percentage point increase in a state-industry's monthly unemployment. Though the opportunity cost of filing falls, the fraction of meritorious claims increases-a sufficient condition for rising discrimination under mild assumptions. Second, we repurpose data from hiring correspondence studies conducted across different cities and time periods during the recovery from the Great Recession. Each percentage point increase in local unemployment reduces the callback rate for older versus younger women by 15%.