Early Retirement Programs and Wage Restraint: Empirical Evidence from France
David M. Gray
University of Ottawa - Department of Economics
Industrial & Labor Relations Review, Vol. 55, No. 3, April 2002
Labor-force withdrawal programs such as government-subsidized early retirement programs are an important unemployment policy instrument in some European countries. Most economists, however, have expressed doubts concerning these programs' efficacy in combating unemployment, in part because they cause a reduction in effective labor supply, which in turn places undue upward pressure on the wage level. This paper analyzes the wage pressure effects of the early retirement program in France in 1984-86. In contrast to most existing studies of such programs, which have analyzed aggregate labor markets based on the country as the unit of observation, the empirical analysis in this paper employs a partial equilibrium framework and uses less aggregated, sectoral data. The findings suggest, consistent with results from most of the aggregate labor market studies, that the early retirement program had a slight positive impact on wage pressure.
Keywords: early retirement programs, wage pressure, France, unemployment policy
JEL Classification: J23, J26, J31, J51Accepted Paper Series
Date posted: May 27, 2002
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo2 in 0.844 seconds