AGE DISCRIMINATION

Age Discrimination

Introduction

Although the United States has had federal legislation outlawing employment discrimination based on age since the 1960s, many European countries have recently had their first experiences with age discrimination laws with the advent of the Framework Directive 2000/78/EC. This directive, put in place in 2000, required member countries to design their own anti discrimination laws by 2003, with an extension to 2006 allowed for age discrimination laws. As the baby boomer population ages, retired workers put stresses on national pension systems across the world. Given reductions in morbidity and mortality, a possible way to mitigate these stresses would be to rise the pension ages for public pensions, in effect decreasing the benefits from annuities and encouraging workers to increase the length of their working lives. However, to make these changes without decreasing the quality of life of these cohorts, employers must be willing to employ older workers.

One method to combat age discrimination in employment is to prohibit it through regulation. Although the goal of these age discrimination laws is to increase the employment of older workers, theoretically the effects of these laws are not as clear. When a worker becomes more difficult to remove, firms are less likely to take a chance on hiring that worker. Empirical work from the United States has already shown that protection laws can have unintended effects. Viewing the new European laws within a framework developed for analyzing U.S. data can help guide EU policy makers and researchers as they attempt to grapple with ways to increase employment among these groups.

Each country in the European Union was able to create its own age discrimination law guided by the principles put forth in the Framework Directive. Although similar in many ways, a diverse set of these laws exists across the EU. The different aspects of these laws may result in contrasting effects. Differences in enforcement, penalties, exemptions, time to file, and burden of proof influence the scope and strength of these laws, as they have influenced the effects of age discrimination laws in the United States. Additionally, some aspects of these laws, such as the effect of prohibiting age-based employment advertisements or discouraging the use of birth dates on resumes, could have a tremendous impact but have not been formally studied.

History

In 1965, the U.S. Department of Labor drafted a report on age discrimination in the economy that would become the basis for the 1967 federal Age Discrimination in Employment Act. This report focused on how negative and inaccurate stereotypes hurt older workers and hurt the economy by keeping productive older workers from contributing. More recently, the issue of age discrimination has become of interest in most developed countries as the retirement of the baby boom generation stresses public pension programs, a problem that could be ameliorated with little loss of quality of life if older people remained in the labor force (Adams, 2004).

The ADEA protects workers and potential workers from age-based discrimination in terms of hiring, firing, and other conditions of ...