Hiring older workers: The case of Portugal

This paper examines the determinants of the age of hiring of older workers in Portugal. The Portuguese case is particularly relevant to study because the level of participation in the labor market for older workers is about six times higher when compared with European countries. The empirical analysis uses Quadros de Pessoal (Tables of Personnel) Portuguese micro database, employer-employee matched files. Specifically, we use data of workers with more than 50 years old and hired during the previous 5 years, splitting the cross-section sample according to firm size. The tested explanatory variables are related to employee, job and firm characteristics. The results show that some determinants of the age of hiring are similar to those obtained previously for other countries. Additionally, sectors of activity with specific private occupational pensions plans affect the hiring of old workers and there are signs of changes in the hiring behavior in last years, probably associated with recent changes in social security laws. Furthermore, the results are relevant for policy design since they identify the sectors and jobs where opportunities for hiring older workers are higher.