Abstract

http://ssrn.com/abstract=2162093
 


 



Will Delayed Retirement by the Baby Boomers Lead to Higher Unemployment Among Younger Workers?


Alicia H. Munnell


Boston College - Center for Retirement Research

April Yanyuan Wu


Boston College - Center for Retirement Research

September 1, 2012

Boston College Center for Retirement Research Working Paper No. 2012-22

Abstract:     
Using 1977-2011 data from the Current Population Survey, this paper investigates the often-repeated claim that delayed retirement by baby boomers will result in higher unemployment among the young, a claim which has been garnering increased attention from the media during the Great Recession. It explores both time-series and cross-state variation, and uses state-level regressions and instrumental-variable models to determine the extent to which such “crowding out” exists in the United States. The estimates show no evidence that increasing the employment of older persons reduces the job opportunities or wage rates of younger persons. Indeed, the evidence suggests that greater employment of older persons leads to better outcomes for the young in the form of reduced unemployment, increased employment, and a higher wage. The patterns are consistent for both men and women and for groups with different levels of education. Estimates using elderly male mortality rates as instrumental variables also produce no consistent evidence that changes in the employment rates of older workers adversely affect the employment and wage rate of their younger counterparts. If anything, the opposite is true. Finally, despite the fact that the labor market downturn that accompanied the Great Recession was the most severe experienced in the post-war era, the effects of elderly employment on other segments of the labor market do not differ from those during typical business cycles.

Number of Pages in PDF File: 54

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Date posted: October 16, 2012  

Suggested Citation

Munnell, Alicia H. and Wu, April Yanyuan, Will Delayed Retirement by the Baby Boomers Lead to Higher Unemployment Among Younger Workers? (September 1, 2012). Boston College Center for Retirement Research Working Paper No. 2012-22. Available at SSRN: http://ssrn.com/abstract=2162093 or http://dx.doi.org/10.2139/ssrn.2162093

Contact Information

Alicia Munnell (Contact Author)
Boston College - Center for Retirement Research ( email )
Fulton Hall 550
Chestnut Hill, MA 02467
United States
617-552-1762 (Phone)
April Yanyuan Wu
Boston College - Center for Retirement Research ( email )
Fulton Hall 550
Chestnut Hill, MA 02467
United States
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