Early Retirement and Employment of the Young
Institute for the Study of Labor (IZA)
RAND Corporation; Institute for the Study of Labor (IZA)
Klaas De Vos
CentERdata; Tilburg University - Center for Economic Research (CentER)
March 1, 2009
RAND Working Paper Series No. WR- 679
Policy makers have often argued that an additional benefit of facilitating early retirement is that it creates employment for the young. This may happen if older and younger workers are substitutes. Nowadays policy makers' goals are to discourage early retirement to counter the economic consequences of an aging population and, interestingly, the consequences for youth employment appear to play no role in this. This paper studies the nexus between employment of older and younger workers in more depth, if only to put any concerns for adverse effects of later retirement to rest. To empirically investigate this issue the authors estimate a dynamic model of employment of the young, prime age and old people using panel data of 22 OECD countries over the time period 1960-2004. Their empirical analysis does not support the hypothesis that employment of the young and old are substitutes and finds some minor complementarities. This suggests that discouraging early retirement will have no adverse effect on youth employment.
Number of Pages in PDF File: 17working papers series
Date posted: April 2, 2009
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo2 in 0.453 seconds