The effects of unemployment rates on employment of senior workers

Abstract

The unemployment rate that faces individuals in different industries can affect workers differently. In this paper we analyze how vulnerable the senior employees are to changes in the unemployment rate. By analyzing registry data for Norwegians between 1972-2015, we demonstrate that the unemployment rate affects senior workers negatively. Our study suggests that the unemployment rate, both the overall and the industry-specific rate, affects senior employees negatively. The likelihood of being employed when reaching senior years, which we define as being between 60-76 years old, decreases when the unemployment rate increases. The effect is more negative for seniors than for the middle aged groups. However, the effect is smaller than for the youngest survey participants, who are between ages 16-35. We also found indications that the effect is greater for senior employees who are not in a relationship, for individuals with low levels of education and for men. We believe that as long as senior employees are valuable assets to the firm, it creates added value to the Norwegian economy to keep them in the labor force as long as possible. If seniors leave the labor force earlier due to insecurity around their position, Norway will experience higher expenses and less economical contribution to the society. We hope that this study will have value for the policy makers action development, and that we can contribute to individual’s personal reflections on selecting working sectors and labor market decisions. We also hope to contribute to future research on senior worker’s position in the labor market.