Graying and staying on the job: The welfare implications of employment protection for older workers

Todd Morris and Benoit Dostie
Working paper #15
Retirement and Savings Institute – September 2023

This study explores the impact of shielding older employees from job loss, taking advantage of recent bans on mandatory retirement laws in different Canadian regions. Using linked tax data between employers and employees, this research finds significant and comparable reductions in job separation rates and retirement risks at age 65, with further declines at older ages. The effects show considerable variation among industries and companies, and almost 40% of the adjustments occur between the announcement and implementation of the prohibitions. There is no evidence indicating a decrease in the demand for older workers. However, welfare effects are influenced by spillovers on savings behavior, workplace injuries, and the timing of spousal retirement.