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Age discrimination laws no shield for older Americans during recession: paper

By Lucia Mutikani

WASHINGTON (Reuters) - Older unemployed Americans got no help from laws against age discrimination during the recession and may have quit the labor force as a result, according to a Federal Reserve Bank of San Francisco study.

The study by David Neumark and Patrick Button, published on Monday, found very little evidence that strong state measures to protect against age discrimination had helped older workers weather the recession better than their younger counterparts.

"In fact, the opposite may have occurred, with older workers bearing more of the brunt of the Great Recession in states with stronger age discrimination protections," they said.

Speculation has been rife that employers discriminated against older job seekers and continued to do so after the downturn, in contravention of the federal Age Discrimination in Employment Act (ADEA).

Though the worst recession since the 1930s ended almost five years ago, economic growth has remained sluggish. Millions of Americans are either out of work or can find only part-time employment. Others have given up the search for work altogether.

In March, the average duration of unemployment for the 55-64 age group was 49 weeks, nearly double the length for the 20-24 age cohort, according to Labor Department data.

"The sharp increases in the duration of unemployment for older workers during and after the Great Recession indicate that older individuals who lost their jobs because of the downturn or who were seeking new employment have had a harder time finding work than other workers have," the authors said.

They said an analysis of the data prior to the 2007-09 recession suggested the anti-age discrimination measures had been effective then.

"An event like the Great Recession disrupts the labor market so severely that sorting out which effects are due to age discrimination and which to worsening business conditions becomes very difficult," they said.

"These complications may make it hard to demonstrate age discrimination, reducing the likelihood that the legal system can intervene effectively and fairly."

They said the downturn might have provided employers cover to engage in age discrimination. Uncertainty over business conditions might also have made them wary of hiring older workers, the authors said.

"Nonetheless, increased discrimination during and after the Great Recession may have extended unemployment durations of older workers, especially those near retirement," the authors said. "In that way, they might have prompted some older workers to hasten their exit from the labor force."

They suggested making changes to the anti-age discrimination measures to make them more effective during downturns.

"Possible modifications could include refinement of legal standards for discrimination that would make it harder to appeal to changes in business conditions," the authors said. "In addition, affirmative policies that would encourage hiring of older workers might be helpful."

Neumark is a visiting scholar at the San Francisco Fed and Button is a Ph.D. candidate at the University of California, Irvine.

(Reporting by Lucia Mutikani; Editing by Dan Grebler)

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