Countries for Old Men: An Analysis of the Age Wage Gap

62 Pages Posted: 8 Jul 2021 Last revised: 16 Aug 2023

See all articles by Nicola Bianchi

Nicola Bianchi

Northwestern University - Kellogg School of Management; National Bureau of Economic Research (NBER)

Matteo Paradisi

Einaudi Institute for Economics and Finance (EIEF)

Date Written: March 11, 2022

Abstract

Drawing on extensive administrative and survey data, this study illustrates the growing wage disparity between older and younger workers in high-income countries. Our analysis pinpoints negative career spillovers as the driving factor, as an increasing number of older workers, a higher retirement age, and constraints on firms' ability to create higher-ranked positions restrict younger workers' access to higher-paying roles. As older workers enjoy lengthier, successful careers, younger workers face lower initial wages, slower career progression, more frequent turnover with lesser financial gains, and decreased likelihood of working for higher-paying firms. We conclude by connecting these outcomes to other labor-market trends.

Keywords: wage growth, age wage gap, career spillovers, older workers, labor-market entry

JEL Classification: J31, J21, M51, J11

Suggested Citation

Bianchi, Nicola and Paradisi, Matteo, Countries for Old Men: An Analysis of the Age Wage Gap (March 11, 2022). Available at SSRN: https://ssrn.com/abstract=3880501 or http://dx.doi.org/10.2139/ssrn.3880501

Nicola Bianchi (Contact Author)

Northwestern University - Kellogg School of Management ( email )

2211 Campus Drive
Evanston, IL 60208
United States

HOME PAGE: http://www.bianchinicola.com

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Matteo Paradisi

Einaudi Institute for Economics and Finance (EIEF) ( email )

Via Sallustiana, 62
Rome, 00187
Italy

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