Three essays on the economics of aging

TitleThree essays on the economics of aging
Publication TypeThesis
Year of Publication2000
AuthorsAdams, SJ
Date Published2000
UniversityMichigan State University
KeywordsDemographics, Employment and Labor Force, Other

An aging U.S. population creates many challenges for policy makers, and, thus, renders research that sheds light on the conditions of older Americans of great importance. My aim is to contribute to this research by using economic analysis to address three very important questions: What is the effect of educational attainment on the health of older Americans? Do firms that use age as a discriminatory criterion in promotion decisions adversely affect the labor market outcomes of their older workers? Finally, does legislation aimed at combating age discrimination change firm behavior in employing older workers? Chapter 1 is an attempt to answer the first question. The missing element of investigations of the education-health relationship is an attempt to identify the causal effect of education. Studies that have shown the correlation between education and health fail to account fully for the fact that education and health are jointly determined. Thus, as long as there are unobserved factors that influence both the attainment of more education and the health status of adults, then it is certainly possible that the correlation between education and health is spurious. This paper uses quarter of birth as a source of exogenous variation in education to show that there exists a causal component of the effect of education on health. Chapter 2 uses the Health and Retirement Study to look at the effect of one type of age discrimination-firm preferences in promotion toward younger workers. While the effect of preferences in promotion is an interesting question in itself, for the purposes of this paper it serves as an indicator of firm discrimination in general. First, the paper verifies whether individuals reporting age discrimination are paid less than similarly trained and qualified workers. Second, the paper investigates how the self-assessed probabilities of early retirement are affected by firm discriminatory practices. Finally, workers are tracked to determine whether they ultimately are more likely to experience lower wage growth, to separate from their employer, or to retire early, as a function of their firm's propensity to promote younger workers. The findings show that those reporting discrimination do in fact experience some negative effects in the labor market. The most significant negative effects are on wage growth. Yet, the evidence also suggests that discrimination may affect individual assessments of the probability of retiring early. The latter effect is quite important when viewed in a public policy context. If the aged are driven into early retirement due to firm discriminatory practices, this has implications for social security financing. Chapter 3 concludes the dissertation by studying the effects of state age discrimination legislation on employment outcomes for older individuals. Specifically, it is shown that legislation boosts the probability of employment for older workers. The probability of being a new hire, however, falls. These effects are largely due to more older workers being retained at their jobs after the passage of the legislation.

Endnote Keywords

Economics, Labor (0510)

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Endnote Author Address

Database ID: DAI-A 61/08, p. 3261, Feb 2001 ISBN 0-599-91580-3

Citation Key6193