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Hiring Older Employees: Do the Age Limits of Early Retirement and the Contribution Rates of Firms Matter?

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  • Pekka Ilmakunnas
  • Seija Ilmakunnas

Abstract

We examine the effects of a Finnish pension reform on firms' incentives to hire older employees. The reform restricted the eligibility ages for early retirement and changed the size-related contribution rates of firms. According to our theoretical model, the positive effect on the values of new hires extends to age groups younger than those directly affected by the reform, and the effects are strongest in the largest firms. These model predictions were confirmed in a difference-in-difference-in-differences analysis on the probability of the hiring of workers of different ages in firms of different sizes.

Suggested Citation

  • Pekka Ilmakunnas & Seija Ilmakunnas, 2015. "Hiring Older Employees: Do the Age Limits of Early Retirement and the Contribution Rates of Firms Matter?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 117(1), pages 164-194, January.
    • Handle: RePEc:bla:scandj:v:117:y:2015:i:1:p:164-194
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    File URL: http://hdl.handle.net/10.1111/sjoe.12089
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    Citations

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    Cited by:

    1. Paweł Chrostek & Krzysztof Karbownik & Michał Myck, 2024. "Labor Market Externalities of Pre-retirement Employment Protection," NBER Working Papers 32371, National Bureau of Economic Research, Inc.
    2. Jennifer Kunz & Laura Michele Ludwig, 2022. "Curbing Discriminating Human Resource Practices—A Microfounded Perspective," Schmalenbach Journal of Business Research, Springer, vol. 74(3), pages 307-344, September.
    3. Vigtel, Trond Christian, 2018. "The retirement age and the hiring of senior workers," Labour Economics, Elsevier, vol. 51(C), pages 247-270.
    4. Bernhard Boockmann & Tobias Brändle, 2015. "Integrating Older Employees into the Labour Market – Evidence from a German Labour Market Programme," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(3), pages 59-64, October.
    5. repec:ces:ifodic:v:13:y:2015:i:3:p:19172607 is not listed on IDEAS
    6. Pekka Ilmakunnas & Mika Maliranta, 2016. "How does the age structure of worker flows affect firm performance?," Journal of Productivity Analysis, Springer, vol. 46(1), pages 43-62, August.
    7. Bernhard Boockmann & Tobias Brändle, 2015. "Integrating Older Employees into the Labour Market – Evidence from a German Labour Market Programme," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(03), pages 59-64, October.
    8. Duvvury, Nata & Radl, Jonas & Sarter, E. K. & Scherger, Simone & Spijker, Jeroen, 2020. "Policy Toolkits on Employment and Ageing: A Conceptual Framework," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 69-83.

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