INCREASING THE AGE OF MANDATORY RETIREMENT AND THE IMPACTS ON JOB MOBILITY IN RHODE ISLAND

State economic developmen t planning involves a complex series of interrelationships among many different areas . While land uses, transportation networks and economic conditions receive the majority of attention in most economic development planning, human resources are an important and often underestinated resource. In 1978, the Age Discrimination in Employment ct of 1967 was amend i d to allow workers to retire at age 70. Since worker retirements have historically created many job opportunities for younger workers, including both internal promotions and employment opportunities for workers ente r ing the labor fo r ce f o r th e first time, serious q uestions have been raised as to the impact of this legislation on the job mobility opportunities f o~ younger workers, women and ninorities . It has been speculated that a decrease in the job mobility opportunities for these groups will accel e rate out-migration from Rhode Island, a development that will negatively affect the economic health and vitality of the state. This research project will examine the impact of raising the age of mandatory retirement on the above mentioned groups of workers within the Rhode Island manufacturing con~unity. In order to accurately assess the impacts, a mail survey of 107 manufacturing firns located in Rhode Island was conducted, which provided a 79 percent return of all questionnaires . The results of this survey indicate that job mobility for younger workers will be impaired by allowing older workers to work for longer periods of time . In addit i on, employers predict that under continuing high rates of inflation, the t rend toward early retirement before age 65 will be completely reversed .

For example, legislation by the Federal government to restrict imports or the implementation of immi g ration laws that limit the number of foreign born allowed to emi g rate to this country are instances of overt uses of public policy to mollify external forces affecting the degree of competition for work within the economy .
In addition to the use of public policy as an instrument to exert direct control over external forces that affect the nature and degree of competition in the workplace public policy has also been used as a vehicle to influence indirectly the forces that affect those currently competing for work. Thus , policies designed to increase employment for the handicapped, women, minorities or the unemployed as well as policies designed to regulate the minimum wages, maximum hours and other standards of work can be viewed as public policy attempts to mediate between the competing interests within the workforce. While the question of increasing the opportunity to compete for work in the labor market has been addressed through legislation such as the Civil Rights Act of 1964, occupational mobility has never been the subject of any comprehensive legislation. Although occupational or job mobility has a variety of facets, it is most commonly associated with the ability of workers to advance along the occupational ladder through increases in skill, responsibility, independence and income. Attempts to address the issue of occupational or job mobility through public policy would be particularly problematic, as internal mobility tends to be a function of worker skill and employer demand.
However, recent federal legislation has taken a dramatic step toward increasing the right of older workers to postpone retirement until age 70. This policy raises serious questions as to the impacts of this legislation on -3the job mobility for younger workers, women, and minorities. In 1978, the Age Discrimination in Employment Act (ADEA) of 1967 was amended to allow workers to remain in the labor force until age 70, an action the Congressional Quarterly Almanac regarded as "probably the most far reaching social measure enacted by the 95th Congress. 11 1 The implications of this public policy change for the state of Rhode Island, where labor force participation is approximately 2 percent higher than the rest of the country and increasing, and where we have an agin g labor force, suggest that job mobility for younger workers, women and minorities may be impaired, driving many of these workers from the state. Such a development would be contrary to state economic development goals, which seek a population distribution that will contain fewer proportional members of the dependent population groups, namely young children and retired adu l ts, who must be supported by those in the labor force. Thus, societal trends, like those foreshadowed by increasing the age of mandatory retirement, have serious implications for the economic health and vitality of the state.
This research project will examine the impact of the 1978 amendment to the ADEA of 1967, focusing specifically on the question of the potential impact on job mobility for younger workers, women and minorities. This project will concentrate on these impacts for manufacturing firms located in Rhode Island and will use the employer as the unit of analysis. The principal research objectives are: -4-1.
To determine the short-term impact of the legislation for younger workers, women and minorities.

2.
To determine the probable impact on worker retirement decisions under continued rates of high inflation.
To achieve these objectives, it was necessary to conduct extensive original research, including a survey of 107 manufacturing firms currently located in Rhode Island.
The second chapter traces the relevant legislation concerning the increase in the age of mandatory retirement.
The third chapter examines the historical trends toward early retirement and the fourth chapter discusses the research findings of other authors. The fifth chapter examines the res~1ts of the survey and the final chapter discusses the implications for Rhode Island.  Although President Johnson displayed concern for the welfare of older Americans in many areas, his specific concern over the employment prospects for older Americans was prompted by the unemployment rate for older workers.
Historically, unemployment rates are highest for workers younger than 25 years of age for many reasons. For example, younger workers lack both seniority and the skills of -7many older workers. Unemployment rates for workers throughout the United States steadily decreases until workers reach the age of forty-five, at which point employment rates again begin to increase. This trend has been evident since 1948 and is generally accurate for all workers .
Perhaps more important than the rate of unemployment is the trend relative to the duration of unemployment for older workers.
In 1967, nearly 25 percent of all unemployed male workers older than 45 years of age were unemployed longer than fifteen (15) weeks. 2 By contrast, the 1976 duration of unemployment for all workers was nearly 16 weeks, but the duration of unemployment for 3 workers 55 years and older was more than 23 weeks . It is important to note that statistics relating to unemployment for older workers must be considered conservative estimates as many older workers faced with the prospect of long-term unemployment will simply retire or drop out of the labor force. In addition, recent nationwide studies conducted in 1977 and 1978 at the National Opinion Research Center clearly show that while few workers older than 50 years of age expected to lose their job within the next year, over 50 percent thought they would experience difficulty in securing another job with commensurate pay and benefits. 4 The distribution and severity of the unemployment burden and the programs appropriate to deal with it are -8of obvious concern to policy makers and it is within this context that the Congress considered the Age Discrimination in Employment Act of 1967. Generally, the act was designed to reduce two distinct elements in the unfairness of prevailing hiring and firing practices.
First, it attempted to end the discrimination that resulted from a misunderstanding of the relationship between -age and job performance. Second, it attempted to end the discrimination that resulted from a deliberate desire or willingness to take advantage of a chronological fact. Although originally passed in 1967, the act has been amended in 1974 and 1978.
Among the original statement of findings and purpose, Congress declared that older workers faced difficulty in retaining jobs, securing employment once unemployed, were subjected to arbitrary age limits in employment that worked to the disadvantage of older workers; and in industries affecting commerce, were subject to arbitrary discrimination in employment, burdening commerce and the free flow of goods in commerce. (ADEA, Section 2(a)). The purpose of the act was to: "promote employment of older persons based on their ability rather than age; to prohibit arbitrary age discrimination in employment; to help employers and workers find ways of meeting problems arising from the impact of age on employment." (ADEA, Section 2(b)).
Generally, the 1967 act made it illegal to fire or to refuse to hire applicants solely because of age. Em-- -10such as a retirement or insurance plan, which is not "a subterfuge to evade the purposes of this Act, except that no such employee benefit plan shall excuse the failure to hire any individual." (ADEA, Section 4(f)(2). Generally, this provision, initiated by New York Senator Jacob Javits, was intended to allow for differential fringe benefits for newly hired older workers. Javits' concern was prompted by his belief that in the absence of this provision, "employ- part of a bona fide seniority system or employee benefit -15plan, except that mandatory retirement based on age is prohibited until age 70. Generally, this exemption was intended to allow age to be considered in funding a retirement benefit plan and to determine the level of benefits to be paid. It also permits an employer to exclude a newly hired older worker from certain limited fringe benefit plans where it would be too costly to fund his or her anticipated benefit in the short time before he or she reaches the upper age limit of the Act. Nothing in the Act is designed to force employees to remain in the workforce longer than they want to remain. For example, pension plans which call for retirement based on a years of service formula, such as the "thirty years and out" retirement system found in many manufacturing industries are not directly affected by the Act. Significantly, the Chapter 28~5 of that Act was amended to include age in the protected categories of race or color, religion, sex, physical handicap or country of ancestral origin. Consistent with the Federal definition, the protected age groups were constructed to include anyone between the ages of forty (40) and seventy (70), inclusive. (Section 28-5-6, (I) }.
In addition, state law~ as set forth under the Fair Employment Practices Act, includes all employers of four (4) or more individuals, (Section 28-5-6 (B) ) thereby extending coverage of the age discrimination provisions to a greater number of workers than covered under Federal law. Although employers of firms that employ four (4) or more persons but fewer than twenty (20) persons, who believe they have been discriminated against on the basis of age, may bring their complaint to the State Commission for Human Rights, they would be precluded from filing a complaint to a Federal court. Rhode Island State law also provides a more These estimates are considered conservative as they assume that all workers employed in businesses or industries with fewer than 4 employees are in the protected age range of 40 to 70, an assumption that undoubtedly deflates the actual number of workers covered under the legislation. Specific breakdowns on the age of workers employed by firm size was not available, and in the absence of these data, the preceding estimates must be considered to represent the lower boundary for the number of workers covered under age discrimination legislation.
In attempting to assess the impact of the Act since  -20-During Congressional testimony concerning the impacts of raising the age of mandatory retirement to age 70, a variety of witnesses representing both the public and private sector raised a number of arguments either in favor of or in opposition to increasing the age of mandatory retirement. While a lengthy analysis of the testimony is unwarranted, a discussion of the major arguments would be useful in understanding the concerns of many witnesses.
Advocates in favor of leaving the age of mandatory retirement at 65 offered the following major arguments: (1) older workers are, as a group, less suited for some jobs because they typically have less education, declining physical and mental capacity, are more resistant to change and do not learn new skills as easily as do younger workers.
(2) medical science has yet to develop an effective technique or set of techniques to guage the physical and mental health of employees.
(3) mandatory retirement for all employees is evenhanded and treats all employees uniformly, sparing unproductive older workers from the embarrassment of being fired or laid off.
(4) management is better able to plan its workforce needs if it knows that workers will retire at a certain age, (5) older workers represent a more expensive workforce as employers must pay higher premiums for health insurance, life insurance, pensions and other fringe benefits.
(6) mandatory retirement creates new job opportunities as well as advancement opportunities for younger workers.
(7) older workers can receive social security or other retirement income, while younger workers do not have any other income.
-21-(8) compulsory retirement is easiest for management as it precludes the need for extensive employee appraisal systems and reduces the likelihood that workers will bring suit against the company for age discrimination.
(9) affirmative action goals will be more difficult to achieve as workers will delay retirement, thereby creating fewer employment opportunities.
Advocates in favor of increasing the age of mandatory retirement from age 65 to age 70 or beyond, offered the following arguments in their testimony to Congressional subcommittees: (1) mandatory retirement based solely on age is discriminatory, contrary to equal employment opportunity and a violation of constitutional rights concerning equal protection of the law.
(2) chronological age alone is a poor indicator of the ability of a person to be productive on the job.
(3) enforced idleness brought about as a result of retirement can have adverse psychological and physical effects on older workers.
(4) mandatory retirement is based on misconceptions about the ability of older workers to perform on the job.
(5) mandatory retirement can cause financial hardships for older persons, particularly those older workers who would like to continue working in order to pay certain financial obligations usually considered common for younger people, such as a home mortgage, installment payments on cars and their children's college tuition.
(6) forced retirement discriminates against many women who have exhibited a discontinuous work pattern, interrupted by home or child care responsibilities, and who have not had the opportunity to become vested for pension benefits.
(7) compulsory retirement increases the drain on the social security system and private pensions by forcing workers to participate in these systems prematurely, -22-(8) mandatory retirement is based on the myth that older workers must make room for younger workers.
(9) forced retirement causes a reduced gross national product through the loss of skills and experience possessed by older workers.
(10) employer pension costs for older workers can be reduced by restructuring or negotiating changes in pension plans for older workers who work past the "normal retirement age." Thus, the arguments both for and against mandatory retirement, to a large extent, seem to be reverse images of    Nearly all retirement studies confirm the proposition that higher Social Security benefits reduce labor force participation and the rapid growth and development of the system 18 has given early retirement a powerful impetus.
Since Social Security benefits were originally intended to replace earnings lost through retirement and were not intended to be an old-age annuity, recipients have always been subjected to an "earnings test". In fact, the 1935 legislation denied benefits to those with any earnings. However, subsequent amendments altered the earnings test requirements.
For example, in 1950 beneficiaries 75 years and older were excluded from the earnings test. In 1954, the exemption was lowered to 72 and the 1977 amendments will remove, effective 1982, the earnings test for everyone over age 70. Currently, the earnings test reduces benefits by one dollar for -31each two dollars of earnin g s above an exempt base of $5,000.
The earnings test, as applied to Social Security beneficiaries, also functions as a disincentive to work for retirees. Researchers have argued that the "true marginal tax rate" on earned income above the $5,000 base is well above the 50 percent reduction in benefits, so that a "middle income worker is hit with a tax rate of over 70 percent. 11 19 A further incentive to retirement, and conversely a disincentive to work, concerns the method chosen by Congress to raise the benefits paid to beneficiaries. Prior to 1972, Congress raised benefits periodically, In 1972, Congress passed an automatic adjustment to reflect changes in the cost of living. However, this automatic adjustment plan had to be reformulated as the adjusted rate was keeping benefits well ahead of inflation. In fact, from 1965 to 1976, the consumer price index rose 80 percent, while benefits increased 119 percent. In 1977, Congress modified the adjustment plan to prevent adjustments from increasing faster than the rate of inflation.
Although increased Social Security coverage and benefits are important, they do not fully explain the labor force trends. In addition to increases in Social Security coverage, disability and pension coverage has also expanded. In 1956, disability insurance was incorporated into the Social Security system, providin g benefits for -32disabled workers 50 and older. Subsequent legislation added benefits for the dependents of disabled workers and in 1960 protection was extended to disabled workers regardless of age. Poor health, regardless of the cause, certainly inhibits both a worker's productivity and the range of jobs available to that worker. Although the general level of health among the population is improving, as reflected in gains in the average life expectancy for all Americans, the percent of workers eligible to receive Social Security disability benefits has also been increasing, contributing at least in part, to lower labor force participation rates for older workers.
Year 1957 1960 1965 1970 1972  The preceding discussion clearly suggests that the retirement decision, like much of human behavior, is ordinarily so complex that it cannot be adequately described or measured by a single dimension. Several dimensions are usually necessary to describe or measure the retirement decision, among them the availability of pension coverage and the age of eligibility for benefits, the health of workers and their assumptions relevant to their ability to afford retirement.
In addition to these factors, withdrawal from the labor force is also influenced by job satisfaction, the number of dependents workers have, the type of industry in which they are employed, previous employment experience and the level of unemployment in the local labor market. 23 -36- The questions of whether workers will continue to retire at the "normal retirement age" gene rally assumed to be 65 years old, or whether the trend to early retirement at age 62 will accelerate, remain constant, or be reversed, will carry considerable impact for policymakers.
The appropriate policies selected will carry considerable weight with respect to where the financial burden for providing payments to those not in the workforce will fall within society.
- Raich (1915) where it was held that one of the intentions of the Fourteenth Amendment was to guarantee the right to work.
The Fifth Amendment has also been interpreted by courts to provide the right to work on the basis that the right to obtain property assumes the ability to secure and maintain employment. Thus, the stated intent of the legislation was to remove a legal obstacle which prevented workers from remaining in the labor force as long as they were both able and willing to continue working.
The issue of the right to work as a civil right which -38should be guaranteed to all Americans was clearly the stated goal of the legislation as expressed by both Congressman Claude Pepper (D-Fla.), the House proponent of the bill that eventually became law, as well as by the Senate leader, Jacob Javits (D-NY). Pepper summarized his feelings by stating: "Our findings to date suggest that mandatory retirement is discriminatory and socially unproductive. It squanders the talent of older people, and it strains an already over-burdened Social Security system, and drives elderly persons in so many instances into poverty and despair. Mandatory retirement is a cruel camoflage masking age discrimination and forced unemployment."24 Although many of his colleagues agreed with him in principle, the question of how many older workers would choose to remain in the labor force, with the concominant ramifications on the employment opportunities of younger workers, concerned many lawmakers.
In We have a big youth employment program. Let's give it some support.
We have a new proposal to give incentives to the private sector to hire more young with certain tax credits or other kinds of incentives.
Let's -39make sure they do that. There is also a very unsettled issue in the field of labor economics.
There is one argument that says there is the fixed lump of labor supply and only so many jobs can be handed around.
The other argument is that if you in some way get more people employed in the labor force, you get an increase in the purchasing power, which increases the demand for more people to be hired.
I frankly have to say I which one is right.
I don't one.
That is all I can say. just a viseral reaction.
It A second major conclusion of the study, and in many ways related to the preceeding observation, will be the increasing importance of an employer's performance appraisal system. With the increase in the age of mandatory retirement, mar g inally productive workers, who would have been retired under the for mer age ceilin g of 65 might want to work until a g e 70. Businesse s would be faced with the decision of allowin g a marginally productive older worker to continue workin g or to terminate that employee. While firms may have been willin g to allow a marginally productive 64 year old employee to work one more year to age 65, it is unlikely that firms will allow unproductive older workers to work until they are 70. Therefore, it is quite likely that personnel appraisal practices will begin to examine productivity of older workers more critically. If this observation is accurate, it would represent an ironic twist, as t h e overriding concern of the legislation was to encourage the participation of older wor k ers in t h e wor k force.
-45- i e y remain in t eir JO s past t e norma re t irement age .
The frequency of this response was predicted to be fully 30 percent above the national average . To the extent that the Rhode Island economy mirrors the New England economy, the long-term implications on employment prospects, in terms of both internal mobility and job opportunities, could be seve re .
However, in an extensive analysis of the influence of the ADEA on job opportunities for women, youth and minorities, the study concluded that the larger the size of the establishment, the more likely employers are to view the amendments as -46reducing job opportunities for these groups . Thus, in the immediate future, the study concluded that the larger firms, because the "criteria for hiring tends to be more objective and impersonal than those of smaller firms" are likely to retain older workers.36 In attempting to guage the implication of the conclusion contained in the study for the Rhode Island labor force, one final conclusion must be highlighted.
In general, the researchers found that the older the labor force, the less likely the amendments were viewed as reducing job opportunities for youth, minorities and women. However, as the proportion of "middleaged" workers (ages 40-59) increased, the amendments were viewed as reducing job opportunities for both women and minorities.
This conclusion suggests that firms with older workforces fully expect these older workers to retire, thereby creating employment opportunities within the firm and that the "younger" the workforce, that is, those firms which have few workers of retirement age, expect to see fewer job opportunities. While this conclusion seems obvious, it does suggest that many and an eastern government agency reported that of those now retiring, 39 "5 percent" are older than 65 years of age.
The survey confirms the findings of the researchers at Portland State university, and the testimony of Congressional witnesses relative to the initial impact of the legislation.
Although few retirement age workers are remaining in the labor force, the BNA study found many employers still feel the overall impact of the legislation is yet to be determined. Perhaps the most immediate impact has been on the personnel departments of many large firms now faced with a need to determine the individual retirement decisions of workers, as well as to develop more complete performance appraisal systems. The BNA survey identified a wide range of responses to the approaches of many firms on the adjustments that many companies are making to accomodate their older workers.           When questioned further about whether any specific group or groups of employees would be more likely to work longer, employers responded with less certainty.
The following table summarizes the responses of employers to the question of whether certain groups of employees will work longer. Question: -58-    -63- Employers were first asked whether mandatory retirement will be abolished nationally, in an attempt to guage both their expectations about the future of mandatory retirement and the potential impacts of increasing the age beyond age 70.  Over 5 out of every 8 employers claim that less than 10 percent of their white collar workers retire before age 65.
While nearly 25 percent of the respondents were unable to provide an estimate to this question, it seems clear that relatively few white collar workers retire before a g e 65.
-67- Total 83 In contrast to the distribution of retirement age for white collar workers , blue collar workers are ~ore likely to retire before age 65 than are white collar workers. employers claimed that less than 10 percent of their blue collar workers retired before age 65. Blue collar workers were more likely than white collar workers to retire before age 65 in nearly every percentage category.
The following crosstabulation suggests that early retirement, before age 65, is more likely for blue collar workers. Nearly one quarter of those surveyed indicated that they had adopted personnel policies designed to assist older workers in preparing for retirement. The employers using flexible personnel policies were nearly un a nimous in their use of part-time options for workers. Generally, employers indicated that workers could combine reduced hours with a reduced work week • . One respondent indicated that older workers also could change assignments to a less strenuous one, and another respondent claimed the union representing workers at his firm would not allow part-time options for older workers.
The question of whether employers will allow their workers about to retire the option of remaining, if only on -70a part-time basis, is considered very important. As previously mentioned, Social Security is designed to provide incentives, amounting to 1/4 of 1 percent for each month between the ages of 65 and 72 for which an individual defers retirement, providing in effect for an increase of 3 percent per year for each year a worker delays retirement. In addition, the earnings test has been increased to $5,500 and will be completely abolished for everyone over 70 years of age. Thus, these two changes are expected to increase the likelihood that older workers will remain in the workforce, thereby decreasing the job opportunities for younger workers and simultaneously depressing relative wages for younger workers.
quarter of the employers in the sample already Nearly one allow workers the option of remaining in the workforce in some reduced capacity, increasing the possibility that opportunities for younger workers will be reduced.
When employers were questioned about whether long term historical trends toward early retirement would be changed, they were evenly split in their expectation concerning this trend.
The following table displays the responses of employers to the question of early retirement. Total 83 Significant numbers of employers do think that historical changes will in fact be altered, and that workers will remain in the workforce past age 65. At least one employer indicated that higher living costs would force more older workers to remain in the labor force. When questioned further, employers also believe that both men and women will woLk for longer periods of time. If yes, do you think there will be any differences in the work patterns of men as opposed to the work patterns of women?
Yes, more men will work longer Yes, more women will work longer Both sexes will work longer However, employers, while expecting more workers to work lon ger , are not in favor of having all workers to be required to work longer.
When presented with a question on raising the age of eligibility for full Social Security benefits to age 68, fully 57 percent of all employers opposed raising the age of eligibility. While one-third of the sample did agree that the age of eligibility should be raised, a significant proportion did not agree that the age should be increased. The relatively strong opposition to increasing the age of eligibility for Social Security benefits is somewhat surprising, as much has been written on the need to redesign -73the Social Security system.
Perhaps the opposition to increasing the age of eligibility is best understood within the context of the employee appraisal systems that most employers utilize.
The following table shows that over three quarters of all employers do not have a formal employee appraisal mechanism . Thus, it can be concluded that the majority of employers do not have a formal mechanism to evaluate the performance of th~ir employees, a •. significant finding that helps to explain why many employers would be opposed to increasing the age of eligibility for Social Security benefits. It is also somewhat surprising to find that only 15 percent of the sample had a formal employee appraisal system, since recent legal activity at both the federal and state levels has emphasized the need for objective employee appraisal systems to support unbiased personnel practices. If large -74numbers of older workers were suddenly to decide to remain in the workforce, it is conceivable that most employers would be unable, except in an informal context, to decide who should be allowed to work. Thus, it is likely that given changes in the age of Social Security eligibility and other areas of retirement policy, older workers will be more inclined to seek legal remedies in the event they are discharged from their jobs.
To some extent this has already eccurred, as the Commission for Human Rights has had numerous age discrimination complaints against manufacturing firms.
The majority of employers do not expect to apply their employee performance appraisal practices more rigorously because of the 1978 ADEA Amendments.
In large measure, this should be expected as few firms even have a formal process.
Question: Total 83 In fact, the six respondents claimed that their performance appraisal practices were to be more rigorously applied -75to protect the c ompany from " incompetant " workers, to increase productivity and to assure proper records . There was no discernible pattern among employers with respect to applying their employee appraisal systems in light of the 19 7 8 ADEA Amendments.
The apparent lack of a formal employee performance appraisal system on the part of many firms is also demon-  Generally, it can be concluded that most firms do not have a formal procedure either to evaluate an employees's job performance or to provide for any additional job training or job retraining.
In addition to the retraining of all workers, employers were asked if there were any specific occupations or trades in which they sought to retrain older workers. As might be expected, very few employers specifically geared any training programs specifically for older workers. Question: -77- Total 83 It can be concluded that retraining older workers will not pose a substantial impediment to job opportunities for younger workers , as less than one employer in ten seeks to retrain workers age 65 and older.
An identical number of employers also believe that retraining older workers will block lines of advancement for workers. The internal competition was specifically identified by a number of respondents to involve management, technical workers and unskilled workers. However, the majority of employers do not provide retraining specifically for older workers and would therefore not expect any significant decrease in opportunities for other workers . Question: -78- Thus, the industry in which a firm is classified seems to be a better predictor of whether retraining will block advancement than does a firm's size.
When employers were asked to identify the effect t he ADEA will have on hiring older workers , fully 83 percent of the employers believed they would not chan g e their p re sent policies.
Only 6 percent felt they would hire more older workers and less than 4 percent believed they would hire fewer older workers. As the next table illustrates, firms expect to continue past hiring practices and do not display any significant movement toward hiring more older workers . Question: -80- The pre c eedin g discussion indicates that many employers have not experienced any significant impacts f~om the 1978 ADEA Amendments.
In an effort to guage the future implications of the 1978 amendments , employers were asked to evaluate the retirement decision of their workers under the assumption that the high inflation rates of the past few years would continue . This question is considered a critical question in the survey, as it is assumed that it will predict the future behavior of workers.
To a large extent , the responses provided in the following  The significance of the above information is that 73 percent of all respondents believe that und e r continued high ra t es of inflation, workers will not elect earl y retirement.
In addition, Table V-25 clearly showed that 34 employers, or 41 percent, did not expect that the national trend toward early retirement would be changed.
Inflation can then be said to be an important variable in the retirement decision.
Since retirement for most workers is characterized by a period of dissavings, that is workers must adjust t heir lifestyle to a reduced income level, it is also a time when Not only do the majority of employers believe workers will not retire at an early age, but a majority of employers also believe that workers will retire either at the normal age or work beyond the normal retirement age.
Attempts to isolate variables that would influence this decision proved unsuccessful. Crosstabulations did not produce any significant relationships. Thus, it is concluded that these trends away from both earl, and normal retirement exist across the board for all firms included in the survey.
When employers were queried on the impact that the ADEA will have on different groups of employees, there were significant differences in the expected impact. Employers were asked to rate the affect on job opportunities for younger workers, women, minorities and older workers , using a scale from "great effect" to "no effect." The following table summarizes the responses to job opportunities for all four groups. -83-

Group
Since retirement age policy now prohi~its mandatory retirement before age 70, job opportunities for various groups of your employees may be affected. Opportunities for some may be reduced, while opportunities for others may be increased . Using a scale from great effect to no effect, please indicate the extent to which you expect job opportunities to be effected in your firm.
Please use t he following codes: In addition , the following suggestions are offerred for consideration . First , manufacturing firms should review their personnel policies to assure that these policies will be in concert with the legislative changes, as well as with the potential changes suggested by the survey results. One obvious area of concern is the pro c ess used to evaluate the performance of wo r kers . Recent court cases involving age discr i mination have indicated that employers must utilize a reasonable performance appraisal system that is job related, written, objective and free of age bias . In as much as the majority of employers characterized their personnel appraisal systems as informal , it is likely that these systems would not withstand legal scrutiny .
-91-Also companies should seek, as much as possible, to have a broad and equitable age distibution across company skill lines. This conclusion is predicated on the fact that a number of firms in the survey indicated they specifically sought to retrain older workers in certain specialized crafts, suggesting that if a company has too many older workers in certain areas it will encoun ter future skills replacement problems.
In yet another vein, the survey results suggest that competition for white collar positions will be most pronounced.
Even without the changes brought about by the ADEA, competition for these middle-management and professional positions was expected to be intense. The ADEA will further exacerbate this situation. Thus, it is likely that many professional The enclo sed survey is the first statewide study of the opinions of the Rhode Island business co~mun ity on the impacts of raising the retirement age from 65 to 70. Your company was randomly selected from a list of Rhode Island businesses and your coope ration in providing us with information is crucial if we are to accurate ly understand and pla n for the effects of th is change in ret irement age policy .
Please b e assured that all responses will be held in the s trictest confidence and results wi ll be displayed only in the agg reg ate.
Should you need the results o f the survey for planning purposes within your organ ization, or wish to discuss the ~uestio n s contairied in the survey, fe e l free to contact either Patric k Fingliss or John O'Brien of our staff at 277-2656.
Thank you in advance for your cooper ation. :..tud_-.

DWV/bam Enclosure
Simply state<l, in o r der for the res u lts o f t h_;_ _,, stu~y to be tr u ly re p res en tativ e of the p ri 9 te business c o nm u G i t y , i t i 5 e s s e " t i a 1 t l a t e a c h f i rm i n t h e s a l!l p l e r · c u r~ t he q u est i onnaire. l n t :1 e e ·.; .:: 11 t t h 2. t y o u r q u e s t i '~ r. n -"· i 'e h a s b e e n ::; J s ? l a ' :.: -.: ci a r e~l a ce m e nt is en c l osed .
! o u r c o ope~a t ioa is gr e atly a ppreciat ed.   , pps. 3-6, 1979). 3Totals provided in "State Summary-Employment and Total Payrolls" R.I. Department of Employment Security, 1978.
As Table B-1 illustrates, the Directory is a closer estimate than is the R.I. Department of Employment Security information when compared to the information provided in "C ounty Business Patterns" in all but six (6) instances.
While it is recognized that all three data sources were prepared in different ways and for different years, the Directory does not reflect any totals that are unrepresentative and do not jeopardize the use of the Directory as a basis for conducting the survey.  Thus, the Directory £.f Manufacters was determined to provide an acceptable list of the manufacturing industries located in Rhode Island because the information contained in the Directory was consistent with other information from "County Business Patterns" and the R.I. Department of Employment Security .
In addition , the Directory was also considered an acceptable universe record because it included firms from all parts of the state and as such can be considered geographically representative of the distribution of manufacturing firms in the state .
Finally, the Directory was used because it did not , by design, systematically exclude any firms from being listed .
Once th e .decision was made to use the Directory as the basis for the selection of firms , a sampling plan wa s prepared .
A lottery-type selection of firms was considered, but rejected on the basis that it would not guarantee that all SIC groups would be included in the survey . In order to achieve coverage in every SIC category from 20 to 39, excluding SIC 21 and 29, a stratified sample was considered to be most appropriate.
In addition, this stratified sample was constructed to utilize the qu o ta method , rather than the proportional method . While the possibility that firms will elect not to respond to a survey is clearly inherent in every survey design, there are survey sampling plans which can, to a large extent, increase the possibility of coveraee in every subset.
In order to achieve the goal of coverage in every SIC category, the sampling plan was designed to include a stratification system using the quota method. The sampling plan was stratified by SIC code, dividing each SIC stratum into three subsets: first, those firms employing between 4 and 19 workers; second, firms employing between 20 and 99 workers; and third, firms employing more than 100 wor kers .
The quota method involved randomly selecting two firms from each of these subsets, thereby allowing for a maximum of six (6) firms from each SIC code. Thus; the sampling plan allowed for a maximum of 108 surveys, a result of six (6) surveys for each of the eighteen (18)   the sampling plan design to include firms employing more than 100 workers as one-third of the entire sample.
As a result, some of the largest private manufacturing employers in Rhode Island, including eight employers of over 400 people and two employers of over 1,000 workers, were included in the sample.
Research into the use of mail s u rvey techniques indicated that there were a number of approaches that increase, albeit slightly, the overall response rate . For example, the use of an introductory postcard announcing that a survey woul d be forthcoming, the use of first-class mail, a cover letter, a followup letter accompanied by another copy of the survey and a survey printed on different colored paper have all been found to increase the response rate in mail surveys.
Generally , the response rate in mail surveys is between 40 and 50 percent, with a response rate of 75 percent achieved only rarely and under optimal conditions. Two other significant variables to the success of the mail survey approach included the "intrinsic value " factor and the !'closed response" approach . The "intrinsic value " factor indicated that the greater the intrinsic interest of the subject of the survey to the questions included in the survey, the higher the response rate. The "closed response" approach Planning Program, under whose auspices the survey was conducted.
The survey was printed on blue paper and was mailed with a self-addressed, stamped envelope bearing the Statewide Planning Program address. A followup letter, including another copy of the survey and another self-addressed, stamped envelope was sent to respondents who failed to return the initial questionnaire.
In addition, all surveys were addressed to the personnel director on the assumption that this person had, by virtue of position, the best vantage point to answer the questions contained in the survey. The personnel director, whether the owner of the company, as in the case of a small business or an individual, as in the case of a larger company, would have the greatest interest in the personnel affairs of that company and presumably would view the questions contained in the survey within the "intrinsic value" context.