Age Discrimination across the Business Cycle

Abstract

We test whether age discrimination rises during recessions using two complementary analyses. Confidential EEOC microdata reveal that age-related firing and hiring charges rise by 3.3 percent and 1.6 percent, 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 plausible 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 percent. (JEL E32, J14, J16, J23, J71, M51)