Where do older jobseekers find work?

In January, we published an article examining the employment outcomes of older jobseekers. We found that, although labor market conditions are currently favorable to jobseekers, unemployment insurance claimants aged 55 and above are still having a harder time finding work than their younger counterparts.

In this article, we use data from the North Carolina Common Follow-up System (CFS) to learn more about the conditions older workers experience after they lose their job, including their wage earnings and their sector of employment following layoff.

Where do older jobseekers find work?

Older jobseekers typically return to the same industry sector where they worked prior to losing their job. For example, only 40% of older workers laid off in 2015 shifted to a different industry sector in the first year after losing their job, compared to 57% of workers under age 25 and 52% of workers aged 25-to-54 [Figure 1].[1] Older workers’ rate of industry switching remained lower than their younger counterparts through the fourth year following layoff.

Figure 1

The most common industries of employment for older workers prior to layoff were Manufacturing, Administrative and Support and Waste Management and Remediation Services, Health Care and Social Assistance, Retail Trade, and Construction [Figure 2]. Four years later, the top five industries of employment for this cohort remained the same. However, some older workers shifted from goods-producing to service-providing sectors; for example, the share employed in Retail Trade increased slightly from 9% prior to layoff to 12% in the fourth year after layoff.

Figure 2

Even though they typically remain employed in the same sector, older workers tend to earn much lower wages after being laid off than they did prior to losing their job. Older individuals who lost work in 2015 saw their real median wage earnings decline from $35,000 in the year before layoff to $19,000 in the first year following layoff [Figure 3]. Even four years later, older workers earned only $27,000, well below their pre-layoff earnings in inflation-adjusted terms. Meanwhile, younger jobseekers saw their real earnings rise in the years following layoff, with both the age 25-to-54 and the under age 25 cohorts regaining their pre-layoff wage levels by the fourth year after their layoff date.

Figure 3

Older workers tend to have more job tenure than younger workers and, as a result, are more likely to suffer a loss of company-specific know-how when they lose their job. This may help explain why older workers experience steeper wage losses after being laid off; it can be difficult to translate the skills acquired in a previous job to the needs of a new employer.

At the same time, workers are less likely to change industries late in their careers. The beginning of an individual’s career is a time for exploration; younger and less experienced workers often change employers and shift to different sectors in search of a job that matches their skills and interests. In contrast, older and more experienced workers have a better sense of their relative strengths and, as a result, are less likely to change industries late in their careers.

These findings have important implications for workforce professionals tasked with helping experienced workers maintain satisfying careers. Older jobseekers who want to remain in the same field where they worked before their layoff may need training and assistance in navigating employers’ ever-evolving skill demands to prevent the large pay cuts often experienced following job loss. On the other hand, some individuals, particularly those working in goods-producing sectors, might be ready to settle into an “encore career” in a new field. Maintaining employment in labor-intensive industry sectors like Manufacturing and Construction can become more challenging as workers get older. This could help explain why some individuals who previously worked in goods-producing sectors subsequently find employment in service-providing sectors like Retail Trade.