Ageism unveiled: understanding discrimination against the elderly

Ageism imposes significant costs on society. This paper investigates age discrimination in labor markets using a series of online experiments. In markets for work requiring cognitive reasoning, employers engage in accurate statistical discrimination against older workers. By contrast, in markets for work requiring accumulated knowledge, employers do not discriminate in hiring but fail to recognize older workers’ higher productivity. A follow-up experiment shows that both younger and older individuals anticipate dis-crimination against older workers in both types of markets, even where employers do not discriminate. These beliefs reduce older workers’ willingness to participate in the labor force. The paper also quantifies the economic losses arising from misperceptions about productivity and age-based discrimination. By providing novel experimental evidence on ageism, this study fills a gap in the literature and offers policy insights for addressing age-based discrimination.