Younger versus Older Job Candidates – an Experimental Study in Hungary.

Éva Berde , Corvinus University of Budapest
Mánuel László Mágó , Corvinus University of Budapest

Even if the push and pull effects are present to make older people to stay on the job market longer, the grey haired face great difficulties when applying for a job. There seems to be a strong preference against older job applicants from the employers’ side. We present the results from our field experiment about the Hungarian job market. We made four hypothetical candidates, two older and two younger women, who applied for similar jobs. The first younger-older candidate pair applied for economic analyst positions, while the other pair for economic assistant positions. Within the pairs, the candidates had comparable work experience and educational levels, and all four candidates had children, the younger candidates had children attending kindergarten and elementary school. In our sample, the younger candidates got more callbacks for interviews than the older candidates. In the second part of our paper we build a model to see how the different acceptance of older job applicants relates to innovation capabilities. We construct an Akerlof-type asymmetric information model where we treat the wage offered to the older applicant and the reservation wage of the applicants as given. We show that the belief of the employer about the innovation capabilities of the potential employee plays a great role in the decision whether the older candidate gets an offer. Based on our current results, the employer rejects the older applicant more often. We show that a change in the belief could result in a better acceptance rate of older applicants.

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 Presented in Session P3. Poster Session Migration, Economics, Environment, Methods, History and Policy