While explicit age limits may define employers’ ideal candidates, they discourage older workers from applying and thereby exclude qualified applicants.
Older workers are less likely to lose their jobs than younger workers. But once unemployed, they face a much harder path back into work. Across OECD countries, among unemployed people, the share who have been out of work for at least a year is over 40% higher for those aged 55 and above than for younger workers (Aitken et al., 2024).
Why is finding a new job so difficult later in life? Employers may worry that older applicants will be less adaptable, overqualified or more expensive. They may also fear that the skills of older applicants have not kept pace with technological change. Because age discrimination is now illegal in most countries, however, employers rarely express such preferences openly.
My new study provides an unusual opportunity to observe them directly. It examines Austrian job advertisements from the early 2000s, when employers were still permitted to specify an applicant’s maximum age. The subsequent prohibition of such limits in 2004 makes it possible to measure both the extent of employers’ age preferences and what happened when they could no longer state them explicitly.
Which jobs exclude older workers?
About one in three vacancies specified an upper age limit. These limits were often severe: most were between 40 and 55, and the average maximum age was just 44.
Vacancies aimed at women were less likely to include an age limit, but when they did, the limit tended to be stricter. Age restrictions were particularly common in business and information technology occupations. They were less frequent and less restrictive in manual and service jobs. This pattern suggests that employers’ concerns centered more on supposedly outdated skills than on older workers’ physical capacities.
Age limits changed who applied and who was hired
The 2004 ban had a clear effect. Employers and occupations that had previously imposed the lowest age limits began receiving more applications from older jobseekers. Crucially, they also hired more of them.
There was no evidence that these hires produced worse employment matches. The earnings, job tenure and sickness absence of newly recruited workers remained unchanged. Vacancies also took no longer to fill. Opening jobs to older applicants therefore expanded their employment opportunities without imposing measurable costs on employers.
These results suggest that explicit age limits did more than describe employers’ ideal candidates. They actively discouraged older workers from applying and prevented firms from considering potentially suitable applicants.
Discrimination changed its language
Age preferences did not disappear entirely after explicit limits were banned. Some employers instead changed the language of their advertisements. Firms that had previously discriminated by age became less likely to use the word “young” but more likely to request characteristics stereotypically associated with youth, such as being “dynamic” or “willing to learn.”
Employers could therefore continue to signal a preference for younger candidates, but these indirect signals were less effective at deterring older applicants than an explicit age limit. Applications and hiring among older workers still increased after the ban.
What can policymakers learn?
The findings suggest that some employers hold excessively pessimistic views of older workers. When the ban prompted them to consider a broader range of applicants, they hired more older people without any deterioration in earnings, job stability, sickness absence or recruitment speed.
Prohibiting discriminatory language in job advertisements is therefore a relatively inexpensive way to improve older workers’ access to employment. But it cannot eliminate discrimination entirely. The severity of the age limits used when they were still legal suggests that the true extent of discrimination is greater than job advertisements alone reveal. Employers who exclude older candidates at the application stage may also judge them unfairly during interviews and other parts of the recruitment process.
Removing explicit barriers is an important first step. Effective policy must also address the stereotypes that lead employers to overlook qualified older candidates in the first place.
References: Aitken, A., García-Mandicó, S., and Williams, M. (2024). Promoting better career choices for longer working lives: Stepping up, not stepping out. OECD Policy Report.
© Lennart Ziegler
Lennart Ziegler is Applied Microeconomist at the Central European University, Austria, and IZA@LISER Research Fellow
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