Reemployment and Earnings Recovery among Older Unemployment Insurance Claimants

The rate of involuntary job loss among older workers has increased in recent years. Previous research has found that after job separation older workers take longer to get back in jobs, and experience bigger earnings declines than younger prime age workers. These studies were based on surveys targeted at older and dislocated workers, which rely on retrospective interviews of strategic samples from the general labor force. Previous studies have not explicitly accounted for the availability of unemployment insurance (UI) benefits between jobs. This paper compares the adjustment to involuntary unemployment of older and younger prime age UI claimants, using a census of UI claimants constructed from records maintained for program administration in a large industrialized mid-western state. We compare subsequent labor market success of older UI claimants aged 50 years and over with younger prime working age claimants aged 30 to 49 following a claim for UI benefits during the major labor market contraction in 2001. We find that relative to their younger prime working age counterparts, older UI claimants return to work at lower rates, are less successful at returning to prior earnings levels, and have lower employment rates in the near term after reemployment. However, older workers who do gai