Are older workers stealing jobs from the young by sticking around in the workforce longer? Balderdash, says a new study.
Since the financial meltdown in 2008, we've been hearing about how downsized older workers are chasing entry-level jobs, removing those first rungs on the career ladder for young workers. After all, with unemployment still high at 7.8 percent, there's only so many jobs to go around. If we're both fighting to get a job and you get one and I don't, that means one less job for me, right?
While that might feel true when you look at one open position with one employer, it's not the case when you look at the big picture.
"There's no crowding out effect," April Wu, co-author of the study and an economist at the Center for Retirement Research at Boston College, told NBC News. "If anything, there's a positive impact."
Researchers analyzed data from 1977-2011 from the Current Population Survey, a large annual labor market survey. They found a 1 percent increase in the employment of older workers actually increased employment of younger workers by .21 percentage points. It also increased hours worked per week by .13 percentage points.
Even after running the numbers again and factoring for differences by age, gender, education, state, and the impact of the Great Recession, the results still held steady.
How can that be? If Grandpa eats the last slice of pie, that means no pie left for little Billy, right?
Well, economies are not pies. They're complex organic systems that can grow and evolve.
With increased income, older workers, "become consumers themselves," says Wu, buying goods and services. That in turn creates more jobs, for both young and old.
More money and business news:
- Wendy's has the fastest drive-thru, study says
- Job seekers find warm welcome in Plains states
- Listing of the Week: Which of these 2 islands will you buy?
- Video: You can still get free checking — here's how
- Sign up for our Business newsletter