Age discrimination and working life: Perspectives and contestations – a review of the contemporary literature

International Journal of Management Reviews (2008)doi: 10.1111/j.1468-2370.2008.00236.x

International Journal of Management Reviews Volume 10 Issue 4 pp. 425–442 425

© 2008 The AuthorsJournal compilation © 2008 Blackwell Publishing Ltd and British Academy of Management. Published by Blackwell Publishing Ltd,9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA

Blackwell Publishing LtdOxford, UKIJMRInternational Journal of Management Reviews1460-85451468-2370© Blackwell Publishing Ltd 2008XXX ORIGINAL ARTICLESAge discrimination and working lifeXX

Age discrimination and working life: Perspectives and contestations – a review of the contemporary literatureGeoffrey Wood1, Adrian Wilkinson and Mark Harcourt

This review highlights some of the principal issues and debates surrounding agediscrimination at the workplace. Essentially, the existing research in this area can be dividedinto three broad, although somewhat overlapping, categories. The first explores the under-lying causes and consequences of age discrimination at the workplace from one or othertheoretical tradition. The second broad body of literature encompasses empirical studieswhich document the nature and extent of age discrimination, based on the use of officialstatistics, and/or firm-level survey evidence. The third explores the effects of variousgovernmental initiatives to reduce the incidence of age discrimination and policy optionsin this area. Even though age discrimination is widely accepted to be prevalent, its causesare rather more contentious. Age discrimination has variously been ascribed to marketimperfections, the product of rational choices and the effects of long-term changes inthe nature of the economy. Policy interventions may be prompted by economic pressure,demographic changes or cultural shifts, and have involved voluntary codes as well aslegislation. Although voluntary codes have generally proved ineffective, the literatureindicates that more formal regulations may still have only limited efficacy, underscoring thedeeply rooted nature of age discrimination in society.

Age discrimination and working life

426 © 2008 The AuthorsJournal compilation © 2008 Blackwell Publishing Ltd and British Academy of Management

Introduction

This review highlights some of the principalissues and debates surrounding age discrimin-ation at the workplace. Essentially, research inthis area can be divided into three broad,although somewhat overlapping, categories.The first encompasses empirical studies whichdocument the nature and extent of age discri-mination, based on the use of official statistics,and/or firm-level survey evidence.

The second broad body of literature exploresthe underlying causes and consequences ofage discrimination at the workplace from oneor other theoretical tradition. The most com-mon theoretical perspectives deployed in thisarea are neo-liberalism and political economy,although postmodern and ethical theories havealso been used by some writers.

The third broad body explores the effects ofvarious governmental initiatives to reduce theincidence of age discrimination, and policyoptions in this area. Much of this literature ispractitioner oriented, and focuses on the specificimplications of changes in formal regulations.After critically appraising the most recentliterature in all three areas, common themesare highlighted, and the relationship betweentheoretical insights and practical policy optionsin the area further explored.

Theme 1: Theoretical Perspectives

Neo-Liberal Accounts

The neo-liberal literature on age discriminationcan be divided into three broad categories.First, there are arguments that age discrimin-ation simply reflects the higher pay of olderworkers, and so reducing this higher paywould resolve any employment difficulties.The second, related, viewpoint suggests thatolder workers often return to the labour marketto gain employment in insecure and poorlypaid occupations as a ‘lifestyle choice’. The thirdviewpoint argues that employers discriminatebecause they lack accurate and meaningfulinformation on the productivity characteristics

of older workers, and instead rely on erroneousstereotypes to make their decisions. If betterinformation on worker productivity wereavailable, especially regarding ‘best practice’at undiscriminating firms, they would cease todiscriminate on the basis of age.

Rational choice and labour costs. Neo-liberalsclaim that older workers’ higher pay simplymakes them less attractive to employers, espe-cially if younger workers are not perceived tobe any less productive (O’Boyle 2001, 960).As a result, older workers are more likely tobe made redundant and experience difficultiesin re-entering employment (ibid. 960). Neo-liberals argue that the traditional linearapproach to careers cannot accommodatecurrent employer needs for more flexibilityand more responsive organizational structures(Arrowsmith and McGoldrick 1997, 259).Instead, employees need to be more ‘realistic’in their career planning and pay expectations(cf. ibid.; Kotlikoff and Gokhale 1992). In amore competitive environment, firms can nolonger afford to advance employees automati-cally along pay scales or pay workers more ifthey have been around longer. Sourcing workersfrom the labour market makes businesssense, if they are cheaper or more flexible thanworkers already employed by the firm (seeFriedman 1997); older workers may simplybe overpriced (Kotlikoff and Gokhale 1992).Older workers have a supposedly shorter work-ing life over which employers can amortizethe costs of training in the new technologies,making them a less profitable human capitalinvestment prospect (Neumark 2003, 319).However, such views discount the loss ofknowledge and corporate memory, experienceand skills associated with devaluing olderemployees, making for ‘a sub-optimal balancebetween youth and maturity’ (Duncan andLoretto 2004, 96), and, the fact that staffturnover rates for older workers are lower(Perrin 2005).

Lazear notes that employees tend to berelatively underpaid in their younger yearsand better paid when they are older, enabling

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© 2008 The Authors 427Journal compilation © 2008 Blackwell Publishing Ltd and British Academy of Management

employees to recoup the effects of underpay-ment through long service (cf. Kotlikoff andGokhale 1992; Lazear 1976; Neumark 2003,308). Less principled employers can obtain ashort-term, labour cost advantage by dispensingwith more expensive, long-service employees(Neumark 2003, 308). However, among workersaged over 25, the effect of years of workexperience has a greater effect on wage ratesthan age has; in other words, the ageing effecton wages decreases as workers age (Lazear1976, 557–558). Hence, employers are morelikely to pay a premium for more experienced(and hence, potentially more valuable) workersthan for older workers per se (Lazear 1976, 548).Furthermore, delayed compensation mayconstitute part of an implicit contract thatdiscourages shirking or poor performance, byshifting the weighting of compensation tothe end of the contract (Hutchens 1986, 439).In other words, if workers reduce their effort,‘the risk of termination increases, the workerswould then forfeit the higher pay they expectin the future’ (Lazear 1991, 90): in other words,variations in pay rates associated with agemay encourage specific patterns of rationaldecisions rather than representing an irrationalmarket distortion.

Neo-liberal human capital theory suggeststhat individuals and firms only engage intraining when perceived gains outweigh costs(Urwin 2006, 88). As a result, firms could,and should, make use of ‘training contracts’,binding workers to a predetermined length ofservice, giving the firm enough time to recoupcosts (ibid.). However, this view fails toaccount for the possibility that firms may per-manently use unskilled, poorly paid labour asa competitive advantage, and thus do littletraining at all. In any case, the availability of‘training contracts’ would have little effect onHR policies towards older workers.

Poor security of tenure and low wages as life-style choice. A second strand of neo-liberalthinking suggests that, if older workers areunable to find work again, this reflects poor‘lifestyle choices’. If older workers were more

proactive in marketing themselves in a greaterrange of occupations, more opportunities wouldbe available to them. Peng and Kleiner (1999,74) argue that older workers need to ‘staycompetitive in a youth dominated labor mar-ket’. Older employees can help themselvesthrough more effectively marketing theirown ‘youthful qualities’ (Shen and Kleiner2001, 25; cf. Schuman and Kleiner 2001, 51).Individuals need to take more responsibilityfor upgrading their skills and be willing toabandon skills and occupations that areobsolete (Shen and Kleiner 2001, 30).

The declining participation of older workersalso reflects other choices. The availability ofgenerous pensions prompts many people toretire early (McVittie et al. 2003, 596). Thisechoes neo-liberal arguments that ‘too much’social security distorts the operation of labourmarkets (Palmore et al. 1985). Such viewpointsrepresent an extension of the argument thatpoverty is a lifestyle choice and so readilyavoidable. Again, most workers ‘retire’ earlybecause they have been laid off and cannotfind work (Patrickson and Ranzijin 2004,428). Early retirement may also be prompted,not so much by a desire to enjoy the ‘thirdage’, but instead as a means to escape fromsystematic undervaluing, discrimination andejection from an organization under lessfavourable circumstances (Branine and Glover1997, 241).

Neo-liberals suggest that the increasedavailability of temporary and part-timeemployment is often beneficial to olderworkers (Arrowsmith and McGoldrick 1997,258; cf. McGregor and Gray 2003). Theflexible work arrangements and variableworking hours associated with insecureand/or part-time jobs are supposedly attrac-tive to older workers, enabling them tocombine leisure and income security withthe chance to contribute to society (Chou andChow 2005, 243). Labour market segmentationtheories have been condemned for suggestingthat atypical forms of employment necessarilyinvolve marginal jobs (Arrowsmith andMcGoldrick 1997, 260). In contrast, Arrowsmith



and McGoldrick (1997, 260) argue that thereis a potential for a ‘win–win situation’, witholder workers working for shorter periodsand/or more flexible hours, and firmsbenefiting from such numerical flexibility.However, Burtless and Quinn (2002) suggestthat older workers would prefer better pensionarrangements to such working.

However, survey evidence indicates thatorganizations are increasingly aware that olderworkers are a source of flexible labour (ibid.,261). Older individuals may seek low-paidwork, not as a lifestyle choice, but becausethey desperately need the money for basic livingexpenses or major health-related expenses(Branine and Glover 1997, 240). Unskilled andsemi-skilled service sector jobs, which arerelatively open to older returnees to the labourmarket, are widely associated with poor work-ing conditions, tight systems of control andlow pay. Flexible working time arrangementscan be attractive to older workers, and manyothers as well, but such arrangements are onlyavailable in the low-end service sector (Sargeant2001, 114). Taylor (1994) argues that olderworkers in financial need are ‘doubly dis-advantaged’ in not having access to decentpensions, and in having to compete withyounger labour market entrants for poorlypaid jobs. Such individuals have little choicebut to take demeaning and poorly paid jobs.In a survey of older Swedish workers, Soidre(2005, 943) found that workers with rewardingjobs generally want to stay in the workforcewhen they are older, whereas those with poorpay and conditions or an instrumental approachto work are often keen to leave. Low-skilledand low-status jobs are therefore unlikely tobe attractive to older workers, unless as a lastresort (see ibid.). In a UK-wide survey ofemployers, Taylor and Walker (1994, 569–591)found that older workers often face a starkchoice between low-wage, low-skill employ-ment in the service sector and unemployment.Hence, numerical flexibility is more likely tobe encountered in the later phases of an indi-vidual’s working life when her/his bargainingposition is weaker (Urwin 2004).

Imperfect information A third strand of neo-liberal thinking suggests that age discriminationreflects poor judgement of, and misinforma-tion regarding, the skills and abilities of olderworkers (cf. Glover and Branine 1997, 275).In other words, if markets operated properly,such discrimination would be ‘driven out’.Thus, neo-liberal policy responses to agediscrimination include the provision of betterinformation to eliminate market imperfections(McDonald and Potton 1997, 298).

Conlin and Emerson (2006, 115) suggestthat employers are more likely to discriminateduring hiring than during redundancy. In aredundancy situation, employers have moreknowledge about the actual performance of theindividuals concerned. It follows that, if firmswere freer to eject newly hired poor performers,they would take more ‘chances’ in hiring so-called ‘high-risk’, older workers (McDonaldand Potton 1997, 298).

Political Economy Alternatives

Political economy accounts locate age dis-crimination in the wider context of industrialchange, and focus on the relationships betweenculture, and particularly institutions, in rein-forcing age-based inequality at the workplace,in the context of wider relations of production.

Industrial change and age discrimination.More critical accounts have pointed to theincreased prevalence of age discrimination,following the crisis of classical Fordism in the1970s. The latter represented the end of a longboom, associated with robust macroeconomicperformance, underpinned by mass uniformproduction (‘Fordism’) and consumption(Jessop 2001). This system broke down in theearly 1970s, in the face of higher commodityprices, an intensification of competition, tech-nological advances and changes in consumertastes. This crisis was reflected in the break-down of a virtuous circle of increasing wagesand the increasing propensity of societies toconsume. Firms were forced to cut costs andrespond more flexibly to changes in demand

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and technology: in many cases, this resultedin a general worsening in the terms and con-ditions of employment (see Kelly 1998).

From a regulationist viewpoint, this crisisresulted in the more flexible use of labour, andinvolved less job security and an increasedincidence of temporary and part-time work,trends that have been most pronounced inliberal market economies (Jessop 2001). InBritain, from 1975 to 1994, the percentage ofeconomically active males dropped from 84%to 79% for those aged 60–64 and 94% to 79%for those aged 55–59 (McDonald and Potton1997). This reflects the effects of technologicalchange and recession (ibid.). Engleman andKleiner (1998, 5) suggest that age discrimina-tion in the US worsened in the 1990s, despiteevidence that individuals were increasinglyaware of their rights under federal law.Although firms may potentially benefit from ahigh-wage, high-commitment, high-productivityparadigm, they may become wedded to lowwages and numerical flexibility as mechanismsfor attaining competitiveness. An increasedemphasis on flexibility and leaner organizationshas had particularly negative consequencesfor older employees. The fragmentation of theemployment relationship is particularly seriousfor those in a disadvantaged position in theexternal labour market (cf. Arrowsmith andMcGoldrick 1997, 258). Older workers mayface greater discrimination because they areperceived to be compliant and thus willing toput up with more (Glover and Branine 1997,285). Inevitably, some groups bear a dis-proportionate share of the costs of periodicstructural changes under capitalism. In parti-cular, it is more socially acceptable, even to theolder workers themselves, for older workersto bear the brunt of job losses. Since olderworkers are nearer to ‘normal’ retirement agethan other age cohorts, they are also more easilypersuaded and pressured to take early retire-ment (Taylor and Walker 1997, 307–308).

The changing sectoral composition ofliberal market economies, following the crisisof the Fordist paradigm, has had particularlynegative implications for older workers. The

dramatic decline in manufacturing in sucheconomies has had particularly negative con-sequences on those generations who spentthe bulk of their working lives in this sector(Taylor and Walker 1997, 308). Even withinsectors, older workers are more likely to beconcentrated in firms operating in mature anddeclining markets, and in more mature firms,and so are more likely to be made redundant(Urwin 2004).

Age and culture: institutions and the making of discrimination. Darity (2001, 980) argues thatdominant groups may decry and undermineother, weaker groups to protect their ownsuperior position. This may take the formof over-valuing of youth and devaluing theelderly. Generalized beliefs about the value ofbeauty, youth, innovation, fashion and progressboth impinge on and are reconstituted throughworkplace practice (Branine and Glover 1997,237). In Western societies – most notably, inliberal market economies such as the US andthe UK, these differences are most pronounced:‘we live in a culture that worships youth andbeauty’ (Macnicol 2006, 11). Economic growthfor its own sake is prioritized, and conspicu-ous consumers are highly valued. In contrast,the poor and disadvantaged groups such as theelderly are derided (ibid., 237).

Brooke and Taylor (2005, 416) point to thecomplexity of the interfaces between age dis-crimination and a range of other organizationalissues and practices. As noted earlier, tensionsmay arise between different segments of theworkforce, with younger workers holdingnegative views of their older peers, particularlyin a general climate of employment insecurity(ibid.). More advantaged age groups such asthose in their 30s and early 40s may defendtheir relatively privileged position by attacking‘political correctness’ or claiming that pensionsunacceptably burden the economically active(see Garstka et al. 2005, 336). Consequently,divisions within the labour force may be used asa means of justifying both workplace inequalityand/or reductions in the role of the state.Disturbingly, Glover and Branine (1997, 275)



note that writers in the medical literature havedebated for some time about whether the treat-ment of younger people should be prioritised,given that older people are more expensive totreat and have supposedly ‘already lived fulllives’. Similar arguments could be advancedregarding employment policies.

Age and social exclusion. In most societies,older people are consistently among the poor-est (Walker 2005b, 825). In turn, poverty hasthe effect of reducing life chances, and wors-ening social exclusion, including employmentprospects (ibid.). Indeed, the entire ideologyof an ‘ageing crisis’ should be seen in thecontext of persistent challenges to the welfarestate, and a desire to shift responsibility forincomes in retirement back to individuals(Walker 2005b, 833). Poor job status and/or alack of employment opportunities can simplyform one component of wider social exclusion,in which those who are unemployed are alsomore likely to have low skills, low incomesand/or live in poor-quality housing (Barneset al. 2006). Workers in manual occupationsare more likely to suffer ill-health in old age;they are also more likely to be made redun-dant (Boyes and McCormick 2005, 3). Olderworkers are generally more reliant on publictransport (Brosi and Kleiner 1999, 103), whichmay further disadvantage them if such trans-port is unavailable or expensive.

Age and other forms of discrimination. Earlypolitical economy approaches neglected raceand gender, but these issues have beenaddressed in more recent critical socialresearch on ageing (Walker 2005b, 816). Forexample, Evandrou and Glaser (2004, 771)note that, having fulfilled child raising andother family social care obligations, olderwomen are very much more likely to facepoverty in their old age. Similarly, Schumanand Kleiner (2001, 48) argue that age discrim-ination can incorporate a gender dimension,with older women being particularly negativelystereotyped. Age represents in part a socialconstruct, and older women are often treated

differently from older men (Schuman andKleiner 2001, 50). Older female workers arefurther handicapped in the job market byhaving less education than their youngercounterparts (ibid.). However, women older thanthe statutory pension age are more likely to befound in employment than men, but this pro-bably reflects less access to, and lower incomesfrom, pensions rather than a greater abilityto overcome prejudice (Duncan and Loretto2004, 100). Breaks for childbearing reducethe length of pension-qualifying service, andmay make it harder for employers to come upwith suitably attractive voluntary, redundancyschemes (Duncan and Loretto 2004, 101).

Rights and Distributive Justice Perspectives

Although the rights-based approach to ethicshas most commonly been deployed to justifythe relentless pursuit of profit, and the elimi-nation of any regulations that interfere withthe free operation of markets (cf. Friedman1997), Rawls (1984) argues that inequalitiesare only justifiable if they benefit the worst offin society. In other words, social inequalitiesare not simply the just desserts of lesser orgreater competence, and so should be examinedrather than ignored (Parekh 1982, 179).

O’Boyle (2001, 962) argues that age dis-crimination is a distributive injustice: thebenefits, burdens and risks of a particular jobshould be distributed equally rather thanborne mainly or totally by older individuals.However, the literature in this area remainslimited, and so there is considerable scope todevelop new ethical theories of age discrimi-nation. Branine and Glover (1997, 237) arguethat the moral concern for the plight of olderworkers is often remarkable for its absence inthe management discourse, and so there is apressing need to redress this imbalance.

Postmodern Accounts

There is a limited postmodern literature onthe nature and effects of age discrimination at

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work. Postmodernists argue that the rules ofmodernity have imploded, with the values ofthe past stripped of their previous meaning,and the knowledge of older individuals de-valued in the process (Glover and Branine 1997,277). In the process, reconfiguring social con-structions of old age recreate cultural negativ-ities: ageing should be seen in terms not onlyof an individual’s life course, but also theirshifting cultural position (Featherstone andHepworth 1989). Older individuals acquiesceto this new reality, occasionally reactingthrough outbursts of extreme conservatism(Glover and Branine 1997, 277). An alternativeresponse may be to seek internally to draw adistinction between the external, negativelysocially constructed visage and the internalbeing: the ‘mask of ageing’ (Featherstone andHepworth 1989). These changes in the natureof discrimination, and the individual’s inter-nalized responses thereto, are only some ofthe many products of a dissolution of existingcultural frameworks and ever-shifting relationsof power in society.

However, postmodern accounts tend to dis-count the close relationship between patternsof discrimination and changes in the processof production, and the extent to which divisionsin the workforce are conducive to accumulation.

Theme 2: The Prevalence of Age Discrimination

Common themes within this body of literatureinclude the nature and widespread prevalenceof age discrimination, and its relationship tobroader social and demographic change.

The Nature and Prevalence of Age Discrimination

Age discrimination can affect people of anyage: for example, middle-aged workers maybe condemned for failing to make careerprogress to a level deemed ‘appropriate’ fortheir age (Arrowsmith and McGoldrick 1997,277). However, in the developed world, olderworkers, and to a lesser extent new, labour

market entrants, are disproportionately affectedby such discrimination. In a study of the percep-tions of different age groups, Garstka et al.(2005, 324) found that both older and youngerworkers were strongly aware that they werediscriminated against vis-à-vis other age cohorts.

As Sennett notes,

(i)n the nineteenth century, the preference for youthwas a matter of cheap labour; the ‘mill girls’ ofLowell, Massachusetts, and ‘put boys’ of northernEngland worked for wages well below those of adults.In today’s capitalism that low-wage preferencefor youth still exists, most notably in factoriesand sweatshops of the less developed parts of theworld. But other attributes of youth now seem tomake it appealing in higher reaches of labour, andthese lie more in the realm of social prejudice.(Sennett 1998, 98)

What constitutes an older worker variesgreatly from sector to sector. In advertisingand IT, a worker as young as 40 can beconsidered ‘too old’ (Duncan and Loretto2004, 96). Furthermore, with age discrimination,everyone can be either an oppressor or a victim,at least at some stage in the life cycle (Duncanand Loretto 2004, 97). This lack of any readilyidentifiable and consistent group of victimsmakes age discrimination more difficult to com-bat through legislation (Duncan and Loretto2004, 97). Age discrimination is also subtle,often with older workers discouraged fromfollowing job leads and told there are no suit-able vacancies or that they are ‘over-qualified’or ‘over-experienced’ (Shen and Kleiner 2001,28). Most research focuses on discriminationagainst older workers in redundancy situations(Walker 2005a), although, in the US, the AARPhas mapped the general position of olderworkers over many years; the latter researchhas revealed that older workers continue to be,proportionately speaking, under-represented inthe labour market (although their participationrate has slowly increased) (Rix 2005, 1–2).Indeed, the average age of retirement hasdeclined in both the US and Great Britain from1960 to 1995, from 66.5 and 66.2 to 63.6 and62.7 years, respectively (Auer and Fortuny



2000; cf. OECD 2004). Similarly, there isconsiderable evidence of widespread agediscrimination in New Zealand (see McGregorand Gray 2002), as well as Australia (seeBennington and Weir 2002).

In the post-war Golden Age, older workerswere generally protected from redundancythrough the last-in, first-out (LIFO) system(Snape and Redman 2003, 79). However, evenin those years, prejudiced employers avoidedhiring older, already unemployed workers inthe often erroneous belief they were eitherprone to sickness or physically incapable.More recently, employers have increasinglypredicated redundancies of older workers onflimsy, subjective perceptions of their sup-posedly inferior technical skills and abilities,especially with regard to computers (Benning-ton and Tharenou 1996; Lyon and Pollard 1997,245). Older workers who feel that age dis-crimination is practised in their organizationare more likely to be dismissed: in other words,negative attitudes held by managers are likelyto be mirrored by a greater tendency to dismissolder workers (Johnson and Neumark 1997,780–781).

Age discrimination can have far reachingconsequences for an individual’s economicand psychological well-being. The decision toretire prematurely can adversely affect aperson’s economic situation for the remainderof his/her life (Chou and Chow 2005, 234).On leaving the workforce, older workers findit very much more difficult to re-enter it; thisis especially true for those over 60 (Sargeant2001, 149). Research conducted by Rix (2005,2) in the US has revealed that dismissed work-ers over 55 were likely to take significantlylonger to find alternative work than theiryounger counterparts. Indeed, younger jobseekers were 40% more likely to gain an inter-view than were older ones (ibid.). Similarly,older workers in New Zealand are likely toexperience longer periods of unemploymentbetween jobs than their younger counterparts(McGregor and Gray 2001). Greater prospectsof redundancy are likely to be particularlystressful for older workers if there is little

likelihood of obtaining meaningful work everagain. Hence, as Neumark (2003, 305) notes,older workers who are laid off are more likelyto exit the workforce permanently, and hencenot even be recorded as unemployed.

Long-term demographic changes in advancedsocieties are likely to make the issue of agediscrimination even more contentious in thefuture. The large baby-boom generation, thoseborn after the Second World War, is nowapproaching ‘normal’ retirement age. Popula-tions in the advanced societies are ageing, andlife expectancies are getting longer (Gunderson2003, 318). By 2020, one-third of the adultpopulation will be over 65 in some countries(McDonald and Potton 1997, 294). This problemis exacerbated by declining pension provisions,with many organizations closing or com-pletely abandoning defined benefit schemes(Neumark 2003, 305).

Chou and Chow (2005, 234–235) argue thatthe recent anti-age-discrimination agenda hasbeen largely driven by labour shortages andthe increasing costs of social welfare. Similarly,Garstka et al. (2005, 321) note that calls forgenerational equity often simply reflect adesire to cut social spending rather than agenuine concern for the specific employmentneeds of older workers (see also Patricksonand Ranzijin 2004). Again, Duncan and Loretto(2004, 96) note that concern over high labourforce exit and relatively low re-entry rates ofolder workers are often prompted by risingcosts of social security benefits, particularlypublic pension benefits (see also Gundersonand Pesando 1988).

There is a growing realization in the morecritical literature that age discrimination is aparticularly prevalent form of discrimination,and that older individuals often face an unen-viable choice between poverty and workplacediscrimination. This is in direct contrast tooptimistic ‘third age’ accounts that suggestthat older individuals are now free to enjoylonger proportions of their lives outside theformal economy (Costa 1998), in leisure,reflection, personal development or voluntaryor flexible working arrangements.

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Negative stereotypes that older workers aresomehow less flexible or less receptive to newtechnologies or skills remain widespread (cf.Hawthorne 1997; Perrin 2005; Sargeant 2001,148; Taylor and Unwin 2001). There are manyother stereotypes affecting older workers,including: they are less flexible, more resistantto change, less alert and generally less pro-ductive (CED 1999; cf. Hawthorne 1997;Neumark 2003, 306; Patrickson and Ranzijin2004, 425; Perrin 2005; Taqi 2002, 115). Olderworkers may also be perceived as less reliablefor health reasons, and their knowledgeundervalued (Austin and Droussitis 2004, 90);moreover, there are embedded beliefs thatolder workforces will become ‘stagnant’ andmake succession planning harder (Hornsteinet al. 2001). Managers are less likely to providesupport for the career development of olderworkers (Neumark 2003, 306). Promotionopportunities for older workers are particularlyless prevalent in jobs that require flexibility,creativity and higher motivation (ibid., 306).

Age and Productivity

Contrary to common belief, there is a complexrelationship between age and productivity(Guest and Shacklock 2005). There is a richbody of research on this topic going back tothe Middle Ages; in reality there is no generalevidence of an age-related decline, thoughattributes change with age (Welford 1992,1986). Deterioration in some functional areas(e.g. vision and speed of reactions) is offsetby gains in others (e.g. caution, experience,wisdom and leadership skills) (Gunderson2003, 325; Lyon and Pollard 1997, 248; Shenand Kleiner 2001, 3; Welford 1988). Indeed,even a slowing of reaction times is likely tovary considerably from case to case: ‘Theseveral stages of information processing frominput to output are affected by slowing withage differently in different tasks’, precludingsimplistic conclusions as to the general declineof reaction times (Welford 1984).

In fact, some evidence suggests that olderworkers are generally more productive because

of their higher levels of organizational com-mitment and loyalty (Brosi and Kleiner 1999,101). Again, older workers are often moremotivated to exceed employer expectations atwork than their younger counterparts (Perrin2005). Greater loyalty, and hence longerexpected tenure, may help offset the perceivedproblems of amortizing training costs whencompared with younger workers with longerperiods of working life ahead of them (Perrin2005; cf. CED 1999). Indeed, given the former,direct staff turnover costs for organizationsemploying older workers are likely to belower (Perrin 2005). Often this will offset theincremental wage and benefit costs associatedwith retaining workers longer (Perrin 2005).In any case, a complex range of factors atindividual and organizational level affectsan individual’s ability to adjust to changes injob content throughout a career (Yeatts et al.2000).

Serious illness and disease occupy only asmall part of most individuals’ lives, andintellectual decline, far from being automatic,usually occurs because of a lack of environ-mental stimulation (Branine and Glover 1997,241). The evidence does not show that olderworkers are less receptive to learning newskills (Welford 1988). Rather, training may insome cases have to be adapted to fit the needsof the older worker (Welford 1988); the elderlydo not represent a homogeneous group, andtheir specific job-related needs are likely tovary (Charness 1996). Considerable evidencesuggests that employees over 50 are better ableto retain training-related information (Brosiand Kleiner 1999, 102). Snape and Redman(2003, 87) also argue that there is no factualbasis for believing that older workers are lessmotivated. Some older workers do need re-training to cope with technological changes(O’Boyle 2001, 960), which firms are frequentlyreluctant to provide because they can insteadhire already trained, younger workers from thelabour market. Again, jobs may be re-designedto cope with the different physical attributesof older workers: attention to ergonomics mayresolve many of the problems experienced by



the elderly at work (Welford 1988; cf. Charness1996).

Cultural Issues: Beyond Stereotypes

Finally, there are cultural differences in atti-tudes to age. All individual societies share acommon base of values, combining religion,state and the law, family and association con-ventions, approaches to science and economiclife (Rickert 2000, 186–187). Interactionistapproaches to culture would see it as thegoods whose cultivation the community takesseriously: it is the common concern ofindividual life worlds – hence, such accountswould see it as assuming a role and significancethat goes beyond economic life (ibid.). Culturalvalues may be accumulated and remade overtime, and hence, assume a significance beyondthe needs of organizations, and, indeed, maynot necessarily reflect the needs of the globalmarketplace. By approaching age from such astarting point, organizations can use the statusof older workers creatively. Hampden-Turnerand Trompenaars (1994, 90) observe:

What seems to work well in Japanese andPacific Rim economies is to increase the statusof employees as their experience and periods ofservice with the company lengthen. As employeesage, the expectation that they will be of greaterinfluence and value increases. Like most socialexpectations, this one tends to fulfill itself. Theemployees to whom more respect is given achievemore. Such a system is deemed fair becauseeveryone ages.

Sometimes, such cultural differences do notreflect conventional stereotypes. For instance,Chinese societies, with their Confucian beliefsystems, are frequently stereotyped in Westernstudies as being deferential to older people,and thus less discriminatory on the basis ofage. Yet, comparative surveys have revealedthat negative stereotypes towards older workersare stronger in Hong Kong than in the US (Chiuet al. 2001). Moreover, within a particularsociety, those of different sub-cultures mayhave more or less conservative attitudes to the

participation of a particular demographiccategory in the labour market (Mason et al.1976): cultural stereotypes may reflect thedominant economic system of the day, butmay also draw on specific religious and socialtraditions, and the subjective reinterpretationthereof.

Constraints on Age Discrimination and Counter-pressures

Although employer fears of having their repu-tation tarnished may deter more overt discrim-ination, information asymmetries may enablemany employers to maintain more subtle formsof discrimination. For instance, employerscan argue that complex changes to the firm’scircumstances make job cuts necessary, citingevidence that employees cannot easily verify(Taylor and Walker 1997, 308). They can alsojustify their decisions to sack older workers byalluding to new skill requirements (Barry andBoland 2004; Gunderson 2003, 324). Thereare also the negative externalities of widelyaccepted discriminatory practices, which areregarded as normal and so not challenged orcritically examined (ibid., 309).

The increased emphasis on equal opportu-nities and rights, despite renewed conservativeattacks on ‘political correctness’, helps tomitigate discrimination (Gunderson 2003, 319).The baby boomer generation, whose greaterdemographic clout drove a considerableamount of the ‘flower child’ discourse of the1960s and 1970s, and the yuppie euphoria inthe 1980s (cf. Glover and Branine 1997, 280;Shen and Kleiner 2001), is now in a positionto use its influence to shift the agenda towardsthe concerns of older workers (cf. Rix 2005;Shen and Kleiner 2001, 27). Understandably,expectations of a rewarding working life, afinancially secure retirement and good healthremain high, particularly for a generationwhose formative years occurred when livingstandards were improving (Naegele and Walker2004). However, the commonplace nature of agediscrimination, and the different categoriesdeployed to define older workers, make it very

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much more difficult to mobilize opposition toageism, particularly when it is justified asnecessary to opening opportunities for youngerpeople (Gunderson 2003, 319). Moreover, theyounger generations, who have to work longerfor lower pension provisions, may challengeany redistribution of resources to the elderly,while governments may reduce spending byshifting the pension burden back onto indi-viduals (ibid.). The financial crises of manyprivate pension schemes, and the generally poorperformance of annuities and similar financialproducts, may also worsen the social exclusionof older people and weaken social cohesionacross generations (ibid.).

Recent Empirical Evidence

Alan Walker’s pioneering Europe-wide surveyin 1992 revealed that over 78%, 62% and 67%of EU citizens believed that older workerswere discriminated against in hiring, promotionand training, respectively (Walker 1993, 26).A 1995 UK-based Institute of Managementsurvey revealed that older workers were dis-proportionately affected in 87% of organizationsthat had implemented downsizing policies(Arrowsmith and McGoldrick 1997, 261).Subsequent survey evidence has revealed that55% of employers used age as a decision-making criterion in hiring, and one-third inredundancies (Sargeant 2001, 147). Sargeant(2001, 148) argues that the prevalence of earlyretirement policies underscores the extent towhich age discrimination has become legiti-mized. Evidence from the UK WorkplaceEmployment Relations Surveys suggests thatolder workers are likely to be seen as morereliable and organizationally committed.However, only 5% of firms encouraged jobapplications from older individuals, and one-quarter still admitted to using age as a selectioncriterion (Urwin 2004). Recent surveys ofUK personnel managers show that attitudesto older workers are mellowing. However,personnel people are often powerless to resistageist behaviour from other, more powerfulmanagers (Lyon and Pollard 1997, 253).

Glover and Branine (1997, 283–285) pointto a relationship between organizational sizeand propensity to engage in age discrimination.Very large firms that have an HR departmentand small firms are less likely to discriminate.In contrast, medium-sized enterprises are morelikely to discriminate for perceived cost andHR planning reasons (ibid.). Although HRmanagers have identified potential benefitsfrom reduced age discrimination, hiring oftenstill depends on key decisions made by juniorand middle managers. Hence, an age diver-sity policy need not be reflected in practice(McNair and Flynn 2005, 7).

A 2005 CIPD survey (conducted in collab-oration with the CMI) found that 22% ofmanagers surveyed admitted that age impactedon their own selection decisions; 59% alsoclaimed that they had been personally dis-advantaged by age discrimination (PinsentMasons 2005; cf. Snape and Redman 2003). A2005 nationwide survey by Cranfield academicsrevealed that nearly one-third of respondentssaw older workers as unreliable and resistantto change (Berry 2005).

These trends are echoed in similar inter-national studies. In Australia, surveys haveindicated a common employer preference foryounger staff (Bennington 2004, 11; Patricksonand Ranzijin 2004, 425). Even when advertise-ments contain no explicit references to age,age targeting is still perceived (Bennington2004, 11). In New Zealand, Harcourt et al.(2004) found that firms collect informationabout age on job application forms. Brookeand Taylor (2005, 425) note that, even amongemployers who believe that the strengths ofdifferent age groups are complementary, thereis still a reluctance to promote equal treatmentas an explicit policy.

The ‘Hidden’ Nature of Age Discrimination

McVittie et al. (2003, 596) note that agediscrimination can be concealed in a rangeof ways. For instance, employers may claimto be committed to equal opportunities, and



argue that any age-based disparities in hiringreflect the absence of ‘suitable’ older workersin the external labour market (McVittie et al.2003, 603). Proving pay discrimination isoften difficult, because many longer-servingolder workers are often well paid (Gunderson2003, 324). Older workers are also less likelyto be relegated to job ghettos than women are,making discrimination less visible (ibid., 325).Indeed, there is evidence of a ‘new ageism’, inwhich age discrimination is concealed by thelanguage of equal opportunities. Specifically,marginal jobs may be upheld as ‘open’ to olderworkers to deflect attention from better jobswithin the same organizations which are not.

Recourse is also made to the nature of thesector to justify discriminatory practice. Forexample, rhetoric about ‘young’ or dynamicworkers’ being the most appropriate for‘young industries’ frequently penetrates therecruitment discourse (McVittie et al. 2003,609; Mueller and Kleiner 2001, 101). Indeed,Mueller and Kleiner (2001, 101) found thatage discrimination is ‘particularly rampant’ innew industries such as IT.

Theme 3: Age Discrimination and the Law – from Voluntarism to Regulation

The ageing population in many Westerncountries has raised concerns about futurelabour shortages and problems with financingpensions. A common policy response has beento promote greater older-worker labour-forceparticipation, achieved by raising the pensioneligibility age or improving the labour marketposition of older workers (Taqi 2002, 107).Proposed solutions have also included: improv-ing access to training, educating employers,introducing greater working flexibility, and/orenacting anti-discrimination legislation (ibid.).In reality, governments and private firms havebeen more likely to use subsidies to promoteearly retirement than to equip older workerswith new skills (ibid., 113–114). In any case,training can lower morale if the employabilityof older workers is not enhanced by it (ibid.).UK evidence suggests that those who have

entered higher education at a mature age haveno better chances of securing employment thanthose who have not (Sargeant 2001, 141).

In the late 1970s and 1980s, governmentpolicy towards older workers centred on‘removing them from the labour market’ tomake room for the increasing numbers ofyounger workers entering the labour market,and to help deal with high unemploymentcaused by recession (Taylor and Walker 1997,309). Policy interventions included the 1977Job Release scheme, which encouraged olderworkers to retire a year early, and providedgreater income support for unemployed menaged 60 to 64 from 1981 onwards (ibid.).

Prior to the EU directive, the UK govern-ment preferred a voluntary approach to the agediscrimination issue, perhaps best illustratedin 1999 with The Code of Practice in AgeDiversity in Employment. This code sought toreduce the incidence of discrimination in hir-ing, redundancies, training and development,promotions and HR planning. However, afollow-up survey by the Employers Forum onAgeing found that most employers were simplyunaware of the Code. Research commissionedby the DfEE in 2001 found some improvementin employer awareness of the code, but veryfew had amended their practices accordingly(Snape and Redman 2003, 78; cf. Thompson2005). Overall, the Code was ineffective: betteremployers were already adhering to its keyprovisions, while those who tended to dis-criminate systematically against older workerswere still largely ignoring it (Sargeant 2001,150).

By 1998, 40% of British workplaces alreadyhad an equal opportunities policy that madeexplicit reference to age (Duncan and Loretto2004, 96). Yet age discrimination remainswidespread, probably because many employershave deeply entrenched prejudices about thebusiness case for age discrimination (ibid.).McVittie et al. (2003, 596) note that equalopportunities policies seem to have had littleeffect in bringing about a fairer representationof older workers. Indeed, there is no evidencethat a voluntary, educational approach to

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ending age discrimination has had anyeffect at all (Taylor and Walker 1997, 311). Incontrast, anti-age-discrimination legislationmakes firms less likely to renege on their com-mitments, and hence strengthens long-termrelationships between employers and employees(Neumark 2003, 315).

According to article 13 of the 1997Amsterdam Treaty, the European Commissionhas the right to take action against age-baseddiscrimination. Non-discrimination has becomeeffectively entrenched as a cornerstone of theEU’s economic constitution (Schiek 2002,293). However, it rests on two contradictoryapproaches to equality. The first construesequality as a mechanism for ensuring that allhave equal access to markets (whether for goodsor labour). Broadening access to markets islikely to deliver greater economic efficiencyand so be conducive to growth. The second isa human-rights-based approach, in whichanti-age-discrimination law is construed as ameans to protect the rights of individuals orgroups from systematic discrimination (ibid.).Consequently, discrimination should be out-lawed, whether or not ending it contributesto greater economic prosperity.

The European Council Directive 2000/78/EC now requires member states to introducelegislation prohibiting age and several otherforms of discrimination (Taqi 2002, 117).New legislation would limit the more blatantforms of discrimination, as, for example, withthe explicit mention of age in job advertise-ments. Moreover, legislation would ‘send apowerful signal that age discrimination iswrong’, discouraging systematic discriminationin other areas (ibid., 120). Nonetheless, morecovert and virulent forms of age discrimina-tion may prove harder to eliminate. Indeed,enactment of anti-age-discrimination laws inother nations has not raised older workforceparticipation rates (Taqi 2002, 119).

The UK government outlawed age discrimi-nation in October 2006, under the EmploymentEquality (Age) Regulations. Age discriminationin hiring, training and promotion is prohibited,as is ‘unjustified’ retirement ages below 65

(Berry 2006a). It is no longer acceptable toask a job-seeker’s age during the hiringprocess, and employers are no longer able toexclude employees from benefits such as lifeinsurance on the basis of age. Employerswill have to monitor the age profiles of theirworkforces and educate staff about what thenew rules mean (Employers Law 2006).Employers are obliged to consider any requeststo work on past retirement age. Employeeshave to be informed of their retirement datesix months in advance to enable them to planfor it better and to ensure that retirementis not ‘used as a cover for unfair dismissal’(Berry 2006a).

The European Court of Justice ruled thatany legislation that provides for unequal,age-related treatment in employment contractcontravenes the Equal Treatment Directive,even prior to the British legislation beingenacted (Berry 2006b). Berry (2005) arguesthat it will take some time to raise awarenessof the changes, and to accumulate a relevantbody of case law. It remains unclear what effectsthe law will have on service-, or age-relatedpay and benefits. Before the law comes intoeffect, less principled employers may engagein rounds of pre-emptive culling, pruningolder workers and condemning them to poorlypaid service sector work (Anonymous 2006).A 2005 survey by academics at CranfieldUniversity found that only 20% of UKemployers had taken account of the forthcom-ing legislation, and a further 20% believedtheir executive board was not committed toending age discrimination.

The multi-faceted, complex nature of agediscrimination may mean that any legislativeinterventions have only partial effects (Urwin2004). The experience of the DisabilityDiscrimination Act suggests that proscribingdiscrimination may not necessarily affectemployment practice (Pope and Bambra2005). Even if age discrimination is outlawed,job applicants may still provide age-relateddetails, believing that this will either helpthem or prevent them from being disadvan-taged (Bennington and Weir 2002, 13). Some



evidence suggests that even having a namemore associated with one generation thananother may be used as a proxy for age(Bennington and Weir 2002, 6).

In a range of other countries, age discrimina-tion is outlawed, as follows:

• In the USA, age discrimination in recruit-ment, training, dismissals and retirementis prohibited by the 1967 Federal AgeDiscrimination in Employment Act,supplemented by the 1990 Older WorkersBenefits Protection Act.

• In Ireland, age discrimination againstworkers under 66 years old in pay, recruit-ment, training, promotion, overtime anddismissals is prohibited under the Employ-ment Equality Act of 1998 (Hornstein et al.2001). Detailed guidelines are laid downfor employers.

• In Australia, age discrimination is pro-hibited by the 2004 Age Discrimination Act.People may not be treated less favourablyin matters relating to employment on thegrounds of age, unless the individualemployee is unable to carry out the job inquestion on account of their age.

Evidence from abroad highlights limita-tions in the efficacy of anti-age-discriminationlegislation. Surveys conducted in the US afterthe implementation of the 1967 Age Discrim-ination Act have revealed that many olderworkers still fear they will be forced to retirebefore they are ready (Ray and Kleiner 2001,53). A 1992 survey found that 1 in 7 werewilling to work but could not find a job (ibid.).The growing tendency towards downsizinghas had particularly adverse consequencesfor older workers (ibid., 54). Harcourt et al.(2004) found that many employers in NewZealand continue to breach the law througha continued emphasis on age in the hiringprocess: age-related information was directlyor indirectly requested from a sizable percent-age of job applicants. However, employers weremore likely to be deterred from discriminatingby a union presence (Harcourt et al. 2004).

Conclusions

A number of key issues and debates emergefrom the contemporary literature on age dis-crimination. Even though age discriminationis widely accepted to be prevalent, its causesare rather more contentious. Age discrimina-tion has variously been ascribed to marketimperfections, the product of rational choices,and the effects of long-term changes in thenature of the economy. Policy interventionsmay be prompted by economic pressure,demographic changes or cultural shifts, andhave involved voluntary codes as well aslegislation. Although voluntary codes havegenerally proved ineffective, the literatureindicates that more formal regulations maystill have only limited efficacy, underscoringthe deeply rooted nature of age discriminationin society.

A common theme through the more rigor-ous literature is that there is little justificationfor age discrimination in terms of physicalcapabilities and higher wage costs. Jobs canbe redesigned to match the specific demandsof the incumbents, while higher wage costscan be offset through greater organization,specific wisdom and higher organization com-mitment. Why, then, does age discriminationoccur? While some can be ascribed to histor-ically embedded cultural norms and values,the causes often appear to be economic. Norare the causes necessarily a market distortionor irrational. Many liberal market nationaleconomies are highly dependent on low-cost,low-wage, and insecure work to staff low-value-added areas of work in the service sectorand related areas of economic activity: theimmediate cost advantages and opportunitiesfor quick return may deter managers fromadopting a long-term perspective, even if thelatter may be more mutually beneficial (seeDore 2000). A possible agenda for futureresearch will be to compare and contrast moresystematically the nature and extent of agediscrimination within specific sectors in dif-ferent national contexts, and under differentproduction paradigms. In the end, curtailing

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age discrimination may necessitate not simplyjob redesign, but rethinking the nature ofwork and the relative power accorded tovarious stakeholder groupings across sectorsand regions.

Acknowledgements

The financial support of the Nuffield Found-ation is gratefully acknowledged. The veryhelpful and constructive comments of theIJMR’s referees are greatly appreciated.

Note

1 Address for correspondence: Prof. Geoffrey Wood,School of Management, University of Sheffield,9 Mappin St, Sheffield S1 4DT, UK. [email protected]

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Geoffrey Wood is from the School ofManagement, University of Sheffield, Sheffield,UK. Adrian Wilkinson is from Griffith Univer-sity. Mark Harcourt is from the University ofWaikato.

Documents

Age discrimination and working life: Perspectives and contestations – a review of the contemporary literature