Abstract
With a vignette experiment among Dutch managers we examine employers’ considerations in the decision to rehire employees after mandatory retirement. We specifically focus on the effects of the employee’s downward wage flexibility (i.e., the willingness to accept a lower wage) and contract flexibility (i.e., preference for a contract which allows flexible hours or employment). The results show that employers are strongly affected by employees who offer to work for a significantly lower wage, but not by the employees’ preference for a particular labor contract. Employers are overall quite disinclined to rehire employees after mandatory retirement, although large differences exist between employees. Part of these differences can be explained by employers having higher retirement age norms (i.e., the maximum age at which employers consider employees suited for work in their organization).
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Notes
We refer to the participants of our study as ‘employers’, although they are mainly line managers who have the authority to make employment decisions.
We define ‘downward wage flexibility’ as the willingness to accept a lower wage; we define ‘contract flexibility’ as a preference for a more flexible employment contract.
We truncated retirement age norm to avoid problems with outliers. This did not substantively alter our results.
By design, participants were shown five descriptions of employees who all wanted to continue in either a full-time, part-time, or on-call employment arrangement. The employment arrangement is mentioned in the vignette description, as well as in the question that serves as the dependent variable (see also Fig. 1).
Random slopes were considered for all vignette variables. Only those that significantly improved the model were included in the final models (Snijders and Bosker 1999).
The coefficients should thus be interpreted in terms of likelihood of rehiring, considering the dependent variable is measured on a scale from 1 to 11.
Model II is not a significant improvement over Model I (\(\chi ^{2}\)(9) = 15.63; p-value = 0.075), but this is mainly due to the variables ‘sector’ and ‘level of subordinates’ taking degrees of freedom while not explaining much.
Model III is a significant improvement over Model II (\(\chi ^{2}\)(4) = 18.52; p-value = 0.001).
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Acknowledgments
The authors gratefully acknowledge the helpful comments of an anonymous referee and the participants at the Feedback Forum of the Netherlands Interdisciplinary Demographic Institute. The LISS panel data were collected by CentERdata (Tilburg University, The Netherlands) through its MESS project funded by the Netherlands Organization for Scientific Research.
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Oude Mulders, J., van Dalen, H.P., Henkens, K. et al. How Likely are Employers to Rehire Older Workers After Mandatory Retirement? A Vignette Study Among Managers. De Economist 162, 415–431 (2014). https://doi.org/10.1007/s10645-014-9234-8
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DOI: https://doi.org/10.1007/s10645-014-9234-8