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Increasing the labour market participation rates of older workers is a means to secure the sustainability of public finances. However, questions about behaviour of unemployed older workers and their employment prospects remain. This paper investigates why workers, aged 50 or over, have less employment opportunities when they grow older. Using a competing risks model on British panel data, we examine the chances of re-employment after unemployment spells for older individuals. We find that human capital characteristics and economic incentives play an important role in the re-employment chances of older unemployed workers. We show that the probability of returning to employment after an unemployment spell decreases as workers get older. An Oaxaca type decomposition supports the role of age in the unemployment duration gap between ‘older' and ‘younger' individuals. The duration of leaving unemployment to employment of older workers would be lower if they will be treated in the same way as the younger ones, which is consistent with elderly employment barriers.
