How Do Older Workers Impact the Labour Market Position of Younger Workers in Post-Transition Economies?

We empirically investigate how population ageing influences the labour market position of workers in different age groups. In particular, we examine how an increased share of older workers affects the employment of younger individuals in a post-transition economy. The literature on substitution between the employment of older and younger workers is mostly limited to developed economies. We employ a panel model that controls for potential endogeneity using an instrumental variable approach. Our major conclusion is that there is no evidence that older workers are displacing younger workers. We contribute to the literature on the lump of labour theory in the context of population ageing by providing evidence from a post-transition economy.