Youth Unemployment and Retirement of the Elderly: the Case of Italy
AbstractThis paper shows that the “lump of labor” 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: “the inducement to retire”, 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 – quite the opposite of the “young-in-old-out” story.
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Bibliographic InfoPaper provided by Department of Economics, University of Venice "Ca' Foscari" in its series Working Papers with number 2008_45.
Date of creation: 2008
Date of revision:
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Postal: Cannaregio, S. Giobbe no 873 , 30121 Venezia
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More information through EDIRC
lump of labour; youth unemployment; early retirement;
Other versions of this item:
- Agar Brugiavini & Franco Peracchi, 2010. "Youth Unemployment and Retirement of the Elderly: The Case of Italy," NBER Chapters, in: Social Security Programs and Retirement around the World: The Relationship to Youth Employment, pages 167-215 National Bureau of Economic Research, Inc.
- 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, and Vacancies
This paper has been announced in the following NEP Reports:
- NEP-AGE-2009-01-03 (Economics of Ageing)
- NEP-ALL-2009-01-03 (All new papers)
- NEP-EEC-2009-01-03 (European Economics)
- NEP-LAB-2009-01-03 (Labour Economics)
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.:
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