More education = longer unemployment if the job is lost. The upside is the more educated the worker, the less likely they are to lose their job, but the downside of being more educated is that once they hit 45 if they lose their job, they are toast.
So what does one do with the over-45s with a BA or higher? … The current mantra is ‘more education is good for you’ but this shows that it can, in the long run, hurt you.
I think there are a number of factors involved here. One of them, obviously, is that the higher you are up the wage scale, the fewer jobs are available for you. Simple supply and demand. Those jobs are higher paid because there are fewer of them.
Second, the older workers frequently have more responsibilities—kids, mortgages, child support, and so on. They may reluctant to take jobs that are below their skill level or what they’re accustomed to because they’re going to find it hard to make ends meet with those jobs.
And they may be underwater—they may owe more on their houses than their houses are worth. That tends to tie you down and make you less willing to move to take a job.
Older workers, at least until they reach 65, tend to have higher healthcare costs. That’s significant particularly in the third and fourth income quintiles.
And then there’s plain old age discrimination.