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Does the welfare state make older workers unemployable?

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  • Saint-Paul, Gilles

Abstract

This paper discusses the specificities of the labor market for older workers. It discusses the implications of those specificities for the effect of labor market institutions on the employability of those workers. It shows that while unemployment benefits indexed backwards and hiring costs are likely to harm these workers more than the average worker, the converse is true for employment protection, provided it is uniform across workers and not specifically higher for older workers. It provides some evidence on the impact of labor market institutions on older workers by comparing their outcome in the United States and France. It discusses how the welfare state can be reformed in order to improve outcomes for older workers.

Suggested Citation

  • Saint-Paul, Gilles, 2009. "Does the welfare state make older workers unemployable?," CEPR Discussion Papers 7490, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:7490
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    References listed on IDEAS

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    1. Behaghel, Luc & Crépon, Bruno & Sédillot, Béatrice, 2008. "The perverse effects of partial employment protection reform: The case of French older workers," Journal of Public Economics, Elsevier, vol. 92(3-4), pages 696-721, April.
    2. Ruhm, Christopher J, 1991. "Are Workers Permanently Scarred by Job Displacements?," American Economic Review, American Economic Association, vol. 81(1), pages 319-324, March.
    3. Daniel Cohen & Arnaud Lefranc & Gilles Saint-Paul, 1997. "French unemployment: a transatlantic perspective," Economic Policy, CEPR;CES;MSH, vol. 12(25), pages 265-292, October.
    4. Jean-Olivier Hairault & Francois Langot & Thepthida Sopraseuth, 2010. "Distance to Retirement and Older Workers' Employment: The Case for Delaying the Retirement Age," Journal of the European Economic Association, MIT Press, vol. 8(5), pages 1034-1076, September.
    5. Lars Ljungqvist & Thomas J. Sargent, 1998. "The European Unemployment Dilemma," Journal of Political Economy, University of Chicago Press, vol. 106(3), pages 514-550, June.
    6. Laurence J. Kotlikoff & Jagadeesh Gokhale, 1992. "Estimating a Firm's Age-Productivity Profile Using the Present Value of Workers' Earnings," The Quarterly Journal of Economics, Oxford University Press, vol. 107(4), pages 1215-1242.
    7. Rob Euwals & Ruud de Mooij & Daniel van Vuuren, 2009. "Rethinking retirement; from participation towards allocation," CPB Special Publication 80, CPB Netherlands Bureau for Economic Policy Analysis.
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    Cited by:

    1. Nicole Bosch & Bas ter Weel, 2013. "Labour-Market Outcomes of Older Workers in the Netherlands: Measuring Job Prospects Using the Occupational Age Structure," De Economist, Springer, vol. 161(2), pages 199-218, June.
    2. repec:spr:jlabre:v:38:y:2017:i:2:d:10.1007_s12122-017-9247-6 is not listed on IDEAS
    3. V. Vandenberghe & F. Waltenberg & M. Rigo, 2013. "Ageing and employability. Evidence from Belgian firm-level data," Journal of Productivity Analysis, Springer, vol. 40(1), pages 111-136, August.
    4. Edward Lazear, 2011. "Wages, productivity, and retirement," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 18(1), pages 17-35, February.
    5. Pekka Ilmakunnas & Seija Ilmakunnas, 2014. "Age segregation and hiring of older employees: low mobility revisited," International Journal of Manpower, Emerald Group Publishing, vol. 35(8), pages 1090-1115, October.
    6. Böheim, Renè & Horvath, Gerard Thomas & Winter-Ebmer, Rudolf, 2011. "Great expectations: Past wages and unemployment durations," Labour Economics, Elsevier, vol. 18(6), pages 778-785.
    7. Ilmakunnas, Pekka & Ilmakunnas, Seija, 2011. "Hiring older employees: Do incentives of early retirement channels matter?," MPRA Paper 30885, University Library of Munich, Germany.
    8. Fredrik Heyman & Per Skedinger, 2016. "Employment Protection Reform, Enforcement in Collective Agreements and Worker Flows," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 55(4), pages 662-704, October.
    9. Arnaud Chéron & Jean‐Olivier Hairault & François Langot, 2011. "Age‐Dependent Employment Protection," Economic Journal, Royal Economic Society, vol. 121(557), pages 1477-1504, December.
    10. Ichino, Andrea & Schwerdt, Guido & Winter-Ebmer, Rudolf & Zweimüller, Josef, 2017. "Too old to work, too young to retire?," The Journal of the Economics of Ageing, Elsevier, vol. 9(C), pages 14-29.
    11. Pierre-Jean Messe & Eva Moreno-Galbis & François-Charles Wolf, 2014. "Retirement intentions in the presence of technological change: Theory and evidence from France," TEPP Working Paper 2014-04, TEPP.
    12. Vincent Vandenberghe, 2011. "Introduction to De ECONOMIST Special Issue on “Ageing Workforces”," De Economist, Springer, vol. 159(2), pages 89-94, June.
    13. Rob Euwals, 2014. "The Labour Market for Older Workers: Mechanisms and Institutions," De Economist, Springer, vol. 162(4), pages 309-313, December.
    14. Vandenberghe, V., 2013. "Are firms willing to employ a greying and feminizing workforce?," Labour Economics, Elsevier, vol. 22(C), pages 30-46.
    15. V. Vandenberghe, 2011. "Boosting the Employment Rate of Older Men and Women," De Economist, Springer, vol. 159(2), pages 159-191, June.
    16. Ichino, Andrea & Schwerdt, Guido & Winter-Ebmer, Rudolf & Zweimüller, Josef, 2013. "Too Old to Work, Too Young to Retire? Revised Version of Working Paper 220, Economics Series, October 2007," Economics Series 302, Institute for Advanced Studies.
    17. Stefan Boeters, 2016. "Age-Specific Labour Market Effects of Employment Protection: A Numerical Approach," Computational Economics, Springer;Society for Computational Economics, vol. 48(2), pages 281-305, August.
    18. Langot, François & Moreno-Galbis, Eva, 2013. "Does the growth process discriminate against older workers?," Journal of Macroeconomics, Elsevier, vol. 38(PB), pages 286-306.
    19. Y. Saks, 2014. "Employees: too expensive at 50? The age component in wage-setting," Economic Review, National Bank of Belgium, issue i, pages 61-74, June.

    More about this item

    Keywords

    employment; employment protection; labor market institutions; older workers; pensions; retirement; welfare state;

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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