By 2011, the median duration of unemployment for older job seekers increased to 35 weeks compared with 26 weeks for younger job seekers, according to the GAO. In 2007, less than a quarter of unemployed older workers were unemployed for longer than 27 weeks, but by 2011, that number had increased to 55 percent. Also, by 2011, more than one-third of all unemployed older workers had been unemployed for over a year.

Focus group participants told the GAO they believed employers' reluctance to hire older workers was their primary reemployment challenge, and several cited job interview experiences that convinced them that age discrimination was limiting their ability to find a new job. Because of legal prohibitions against age discrimination, employers are unlikely to explicitly express a lack of interest in hiring older workers; however, one workforce professional told the GAO that local employers had asked her to screen out all applicants over the age of 40.

Job loss can result in fewer years of work over a worker's lifetime, which can lower the worker's retirement income. Fewer years of work can prevent a worker who is covered by a traditional defined benefit plan from having enough years of work with an employer to vest in employer-funded retirement benefits. And even if a worker who is covered by a traditional DB plan has enough years of work to earn a right to the benefits, fewer years of work can reduce a worker's final retirement benefit if the number of years worked is used in the formula for calculating retirement benefits.

For workers with defined contribution plans, having fewer years of work can limit the amount of yearly employee and employer contributions that accumulate in a worker's account. Moreover, Social Security retirement benefits may be reduced as a result of fewer years of work because the benefits are based, in part, on a calculation of the worker's average monthly earnings over 35 years. The 35 years used for the calculation are those with the worker's highest earnings, adjusted for changes in wage levels. If a worker has less than 35 years of earnings, then zeros would be used for earnings in the missing years, and this will result in a lower calculated benefit.

When older workers do find jobs, they earn much less than they did before they lost their jobs. The median earnings replacement rate for workers aged 55 to 64 who were displaced from 2007 to 2009 was only 85 percent, compared with about 95 percent for workers between the ages of 25 and 54 and more than 100 percent for workers ages 20 to 24.