../../../MY_DOC%7E1/MY_DOC%7E1/ECONNEWS/South-Western%20College%20Publishing%20-%20Economics  
Oldies are Seen as Golden
Subject Comparative statics
Topic Labor Markets
Key Words Older workers, jobs, tight labor market, retirement, benefits, part-time, slowdown, layoffs
News Story

During the 1990s, older workers experienced a revolution in employer attitudes. In the early part of the decade, senior workers often found their jobs eliminated. In the latter years of the 1990s and the early part of the new decade, in the face of a tight labor market, employers are asking those thinking of retirement to stay, even offering benefits to those who are part-time.

Baby boomers are nearing retirement. Whether they retire or continue to work depends a lot on flexibility. Some are willing to delay retirement or return to work if they work part-time. Others are willing to work if they can do so at home using a computer.

While it is true that the slowdown in the economy has caused some layoffs, they have not been widespread enough to indicate any disproportionate effect on older workers. Experts say that employers still like to retain retirement-age workers because they have important expertise, are loyal, and provide networking contacts.

(Updated February 1, 2001)

Questions
1. a) What determines the supply of a particular type of labor? Cite three determinants.
b) Why is the supply of older workers decreasing? Relate your answer to the determinants of labor supply.
c) Draw a labor supply and diagram of the market for older workers. Show the change in the equilibrium wage and employment due to the change identified in (b).
2. a) What determines the demand for a particular type of labor? Cite two determinants.
b) Why is the demand for older workers increasing? Relate the reasons to the theoretical determinants of demand.
c) On your diagram of the market for older workers, show the change in the equilibrium wage and employment level following the change in attitude toward the employment of older workers.
3. Employers are now offering more non-wage benefits and improved working conditions. How will this affect the demand for and/or supply of labor and the equilibrium wage and employment of older workers? Illustrate on your diagram.
Source Stephanie Armour, "More firms ask retirees to remain," USA Today, January 4, 2001.

Return to the Labor Markets Index

©1998-2002  South-Western.  All Rights Reserved   webmaster  |  DISCLAIMER