Advanced Search
MyIDEAS: Login to save this paper or follow this series

Too Old to Work, Too Young to Retire?

Contents:

Author Info

  • Ichino, Andrea

    ()
    (European University Institute)

  • Schwerdt, Guido

    ()
    (University of Konstanz)

  • Winter-Ebmer, Rudolf

    ()
    (University of Linz)

  • Zweimüller, Josef

    ()
    (University of Zurich)

Abstract

We use firm closure data from social security records for Austria 1978-1998 to investigate the effect of age on employment prospects. We rely on exact matching to compare workers displaced due to firm closure with similar non-displaced workers. We then use a difference-in-difference strategy to analyze employment and earnings of older relative to prime-age workers in the displacement and non-displacement groups. Results suggest that immediately after plant closure the old have lower re-employment probabilities as compared to prime-age workers but later they catch up. While among the young the employment prospects of the displaced remain persistently different from those of the non-displaced, among the old the effect of displacement fades away, and actually disappears even immediately after plant closure when the effect of tenure based severance payment is controlled for. Our evidence suggests that increasing the retirement age does not necessarily produce individuals who are “too old to work but too young to retire”

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://ftp.iza.org/dp3110.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3110.

as in new window
Length: 41 pages
Date of creation: Oct 2007
Date of revision:
Handle: RePEc:iza:izadps:dp3110

Contact details of provider:
Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org

Order Information:
Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Email:

Related research

Keywords: aging; employability; plant closures; matching;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Johannes F. Schmieder & Till von Wachter & Stefan Bender, 2009. "The Long-Term Impact of Job Displacement in Germany During the 1982 Recession on Earnings, Income, and Employment," Discussion Papers, Columbia University, Department of Economics 0910-07, Columbia University, Department of Economics.
  2. Winter-Ebmer, Rudolf, 1998. "Potential Unemployment Benefit Duration and Spell Length: Lessons from a Quasi-Experiment in Austria," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, Department of Economics, University of Oxford, vol. 60(1), pages 33-45, February.
  3. Judith Hellerstein & David Neumark, 2004. "Production Function and Wage Equation Estimation with Heterogenous Labor: Evidence from a New Matched Employer-Employee Dataset," Working Papers, Center for Economic Studies, U.S. Census Bureau 04-05, Center for Economic Studies, U.S. Census Bureau.
  4. Luc Behaghel & Bruno Crépon & Béatrice Sédillot, 2008. "The perverse effects of partial employment protection reform: the case of French older workers," Working Papers, Institut National de la Recherche Agronomique, France 23397, Institut National de la Recherche Agronomique, France.
  5. Rafael Lalive & Jan C. van Ours & Josef Zweimüller, 2004. "How Changes in Financial Incentives Affect the Duration of Unemployment," CESifo Working Paper Series 1337, CESifo Group Munich.
  6. Lalive, Rafael & Zweimuller, Josef, 2004. "Benefit entitlement and unemployment duration: The role of policy endogeneity," Journal of Public Economics, Elsevier, Elsevier, vol. 88(12), pages 2587-2616, December.
  7. Kristiina Huttunen & Jarle Møen & Kjell G. Salvanes, 2011. "How Destructive Is Creative Destruction? Effects Of Job Loss On Job Mobility, Withdrawal And Income," Journal of the European Economic Association, European Economic Association, European Economic Association, vol. 9(5), pages 840-870, October.
  8. Avner Ahituv & Joseph Zeira, 2011. "Technical Progress and Early Retirement," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 121(551), pages 171-193, March.
  9. Lazear, Edward P, 1979. "Why Is There Mandatory Retirement?," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 87(6), pages 1261-84, December.
  10. Stevens, Ann Huff, 1997. "Persistent Effects of Job Displacement: The Importance of Multiple Job Losses," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 15(1), pages 165-88, January.
  11. Louis S. Jacobson & Robert J. LaLonde & Daniel G. Sullivan, 1993. "Long-term earnings losses of high-seniority displaced workers," Economic Perspectives, Federal Reserve Bank of Chicago, Federal Reserve Bank of Chicago, issue Nov, pages 2-20.
  12. Guido Schwerdt, 2008. "Labor Turnover before Plant Closure: ‘Leaving the Sinking Ship’ vs. ‘Captain Throwing Ballast Overboard’," CESifo Working Paper Series 2252, CESifo Group Munich.
  13. Helmut Hofer & Reinhard Koman, 2006. "Social security and retirement incentives in Austria," Empirica, Springer, Springer, vol. 33(5), pages 285-313, December.
  14. Alan B. Krueger & Andreas Mueller, 2008. "The Lot of the Unemployed: A Time Use Perspective," Working Papers, Princeton University, Department of Economics, Industrial Relations Section. 1062, Princeton University, Department of Economics, Industrial Relations Section..
  15. Andrea Ichino & Guido Schwerdt & Rudolf Winter-Ebmer & Andrea Ichino, 2013. "Too Old to Work, Too Young to Retire?," NRN working papers, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria 2013-09, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
  16. Julia I. Lane & John C. Haltiwanger & James Spletzer, 1999. "Productivity Differences across Employers: The Roles of Employer Size, Age, and Human Capital," American Economic Review, American Economic Association, American Economic Association, vol. 89(2), pages 94-98, May.
  17. Francesco Daveri & Mika Maliranta, 2007. "Age, seniority and labour costs: lessons from the Finnish IT revolution," Economic Policy, CEPR;CES;MSH, CEPR;CES;MSH, vol. 22, pages 117-175, 01.
  18. Louis S. Jacobson & Robert J. LaLonde & Daniel G. Sullivan, 1992. "Earnings losses of displaced workers," Working Paper Series, Macroeconomic Issues, Federal Reserve Bank of Chicago 92-28, Federal Reserve Bank of Chicago.
  19. Roberto Leombruni & Claudia Villosio, 2005. "Employability of Older Workers in Italy and Europe," LABORatorio R. Revelli Working Papers Series, LABORatorio R. Revelli, Centre for Employment Studies 43, LABORatorio R. Revelli, Centre for Employment Studies.
  20. David Card & Daniel Sullivan, 1987. "Measuring the Effect of Subsidized Training Programs on Movements In andOut of Employment," NBER Working Papers 2173, National Bureau of Economic Research, Inc.
  21. Bartel, Ann P & Sicherman, Nachum, 1993. "Technological Change and Retirement Decisions of Older Workers," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 11(1), pages 162-83, January.
  22. Hakola, Tuulia & Uusitalo, Roope, 2005. "Not so voluntary retirement decisions? Evidence from a pension reform," Journal of Public Economics, Elsevier, Elsevier, vol. 89(11-12), pages 2121-2136, December.
  23. Josef Zweimüller & Rudolf Winter-Ebmer & Rafael Lalive & Andreas Kuhn & Jean-Philippe Wuellrich & Oliver Ruf & Simon Büchi, 2009. "Austrian Social Security Database," NRN working papers, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria 2009-03, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
  24. Sharon M. Oster & Daniel S. Hamermesh, 1998. "Aging And Productivity Among Economists," The Review of Economics and Statistics, MIT Press, vol. 80(1), pages 154-156, February.
  25. Vegard Skirbekk, 2003. "Age and individual productivity: a literature survey," MPIDR Working Papers, Max Planck Institute for Demographic Research, Rostock, Germany WP-2003-028, Max Planck Institute for Demographic Research, Rostock, Germany.
  26. Chan, Sewin & Stevens, Ann Huff, 2001. "Job Loss and Employment Patterns of Older Workers," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 19(2), pages 484-521, April.
  27. Ruhm, Christopher J, 1991. "Are Workers Permanently Scarred by Job Displacements?," American Economic Review, American Economic Association, American Economic Association, vol. 81(1), pages 319-24, March.
  28. Mark Aguiar & Erik Hurst & Loukas Karabarbounis, 2013. "The Life-Cycle Profile of Time Spent on Job Search," American Economic Review, American Economic Association, American Economic Association, vol. 103(3), pages 111-16, May.
  29. David Card & Raj Chetty & Andrea Weber, 2006. "Cash-on-Hand and Competing Models of Intertemporal Behavior: New Evidence from the Labor Market," NBER Working Papers 12639, National Bureau of Economic Research, Inc.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp3110. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.