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The fallacy of the lump of labour theory: Evidence for Latin America

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  • Ignacio APELLA

Abstract

In a context of population ageing, this article analyses the “lump of labour” theory using empirical evidence from Latin America. Instead of finding a crowding‐out effect, estimations using a fixed effects model on a panel of annual data drawn from household surveys in 11 countries between 2002 and 2019 suggest a positive correlation between the employment rates of older adults and young people. Additionally, results show a positive association between the labour incomes of older and young workers. These findings could indicate that an expansion in the employment of older adults maintains economic growth and, therefore, a greater demand for labour, which could be supplied by young people.

Suggested Citation

  • Ignacio APELLA, 2024. "The fallacy of the lump of labour theory: Evidence for Latin America," International Labour Review, International Labour Organization, vol. 163(1), pages 49-71, March.
    • Handle: RePEc:bla:intlab:v:163:y:2024:i:1:p:49-71
    DOI: 10.1111/ilr.12396
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