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The Pre-Retirement Job Search: A Basic Explanation of the Older Worker Employment


  • Jean-Olivier Hairault

    () (Paris School of Economics (PSE), University of Paris I Panthéon-Sorbonne and IZA (Bonn))

  • François Langot

    () (PSE - jourdan, CEPREMAP and GAINS University of Maine)

  • Thepthida Sopraseuth

    () (PSE - jourdan, CEPREMAP and EPEE University of Evry)


This paper presents a theoretical foundation and empirical evidence in favor of the view that the retirement age decision impacts on the search intensity of older workers before this age. Countries with a retirement age at 60 are indeed characterized by lower employment rates for workers aged 55-59. Based on the French Labor Force Survey, we show that the likelihood of employment is significantly affected by the distance from retirement, in addition to age and other relevant variables. We then extend McCall’s (1970) job search model by explicitly integrating life-cycle features and the retirement decision. Using simulations. we show that the distance effect in conjunction with the generosity of unemployment benefits for older workers explains the low rate of employment just before the eligibility retirement age. Finally, we show that implementing actuarially-fair schemes, not only extends the retirement age, but also encourages a more intensive job-search by older unemployed workers.

Suggested Citation

  • Jean-Olivier Hairault & François Langot & Thepthida Sopraseuth, 2007. "The Pre-Retirement Job Search: A Basic Explanation of the Older Worker Employment," Documents de recherche 07-01, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
  • Handle: RePEc:eve:wpaper:07-01

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    References listed on IDEAS

    1. Canice Prendergast, 1999. "The Provision of Incentives in Firms," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 7-63, March.
    2. Xavier Timbeau, 2002. "Le partage de la valeur ajoutée en France," Revue de l'OFCE, Presses de Sciences-Po, vol. 80(1), pages 63-85.
    3. Myerson, Roger B. & Satterthwaite, Mark A., 1983. "Efficient mechanisms for bilateral trading," Journal of Economic Theory, Elsevier, vol. 29(2), pages 265-281, April.
    4. Kraft, Kornelius & Ugarkovic, Marija, 2006. "Profit sharing and the financial performance of firms: Evidence from Germany," Economics Letters, Elsevier, vol. 92(3), pages 333-338, September.
    5. Céline Prigent, 1999. "La part des salaires dans la valeur ajoutée en France : une approche macroéconomique," Économie et Statistique, Programme National Persée, vol. 323(1), pages 73-94.
    6. Cahue, P. & Dormont, B., 1993. "Profit-Sharing: Does It Increase Productivity and Employment?," Papers 9307, Paris X - Nanterre, U.F.R. de Sc. Ec. Gest. Maths Infor..
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    Cited by:

    1. Sarah Le Duigou, 2012. "Effect of Age on the Wage Distribution: A Quantitative Evaluation Using US Data," Working Papers halshs-00856225, HAL.

    More about this item


    Job search; Older workers; Retirement;

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions


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