Youth Unemployment and Retirement of the Elderly: The Case of Italy
In: Social Security Programs and Retirement around the World: The Relationship to Youth Employment
AbstractThis paper shows that the âlump of laborâ assumption fails in Italy. The direct relationship between the unemployment rate of the young and the labor force participation of the old is pro-cyclical, i.e. a higher labor force participation of the old is related to a lower unemployment rate of the young. Hence both vary with the business cycle. In order to overcome endogeneity problems in explaining unemployment of the young, we resort to a simulated variable: âthe inducement to retireâ, which is constructed by simulating the social security benefits. We related the unemployment rate of the young to this incentive measure and find that a higher inducement to retire is associated to a higher unemployment rate â quite the opposite of the âyoung-in-old-outâ story.
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- Agar Brugiavini & Franco Peracchi, 2008. "Youth Unemployment and Retirement of the Elderly: the Case of Italy," Working Papers 2008_45, Department of Economics, University of Venice "Ca' Foscari".
- H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
- J2 - Labor and Demographic Economics - - Demand and Supply of Labor
- J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
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