The Life-cycle Profile of Worker Flows in Europe

15 Pages Posted: 14 Aug 2018

See all articles by Etienne Lalé

Etienne Lalé

University of Quebec at Montreal (UQAM) - Université du Québec à Montréal; CIRANO; IZA

Linas Tarasonis

Vilnius University; Bank of Lithuania

Date Written: July 1, 2018


In this paper, we first provide a comprehensive account of the relationship between cross-country differences in aggregate employment and disaggregated differences in worker flows along the life cycle. To this end, we use survey micro-data for 31 European countries, and estimate the life-cycle profiles of transition probabilities across employment, unemployment and nonparticipation for each country. We develop a decomposition measuring the contribution of these transition probabilities to aggregate employment differences. We find substantial cross-country heterogeneity with respect to the role of worker flows out of each labor market state. Next, we relate this heterogeneity to cross-country differences in labor market institutions. Our analysis emphasizes age-dependent vs. age-independent labor market policies, and policies related to family formation, planning and dissolution. By going well beyond the study of differences of aggregate worker flows, we obtain a rich picture of the employment effects of labor market institutions.

Keywords: Employment, Unemployment, Labor Force Participation, Life cycle, Worker Flows, Labor Market Institutions

JEL Classification: E02, E24, J21, J64, J82

Suggested Citation

Lalé, Etienne and Tarasonis, Linas, The Life-cycle Profile of Worker Flows in Europe (July 1, 2018). Available at SSRN: or

Etienne Lalé (Contact Author)

University of Quebec at Montreal (UQAM) - Université du Québec à Montréal ( email )

CP 8888 Succ Centre Ville
Montréal, Québec H3C3P8

CIRANO ( email )

2020 rue University, 25th floor
Montreal H3C 3J7, Quebec

IZA ( email )

P.O. Box 7240
Bonn, D-53072

Linas Tarasonis

Vilnius University ( email )

Sauletekio ave. 11, Vilnius

Bank of Lithuania ( email )

Totoriu 4
Vilnius, LT-01121

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