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Job Creation and Job Destruction over the Life Cycle: The Older Workers in the Spotlight

Author

Listed:
  • Hairault, Jean-Olivier

    (University of Paris 1 Panthéon-Sorbonne)

  • Chéron, Arnaud

    (University of Le Mans)

  • Langot, François

    (University of Le Mans)

Abstract

This paper extends the job creation - job destruction approach to the labor market to take into account the life-cycle of workers. Forward looking decisions about hiring and firing depend on the time over which to recoup adjustment costs. The equilibrium is typically featured by increasing (decreasing) firing (hiring) rates with age, and a hump-shaped age-dynamics of employment. The empirical plausibility of the model is assessed by incorporating existing age-specific labor market policies in France. Finally we show that the age-dynamics of employment is optimal when the Hosios condition holds and we design the optimal age-pattern for employment policies when this condition does not apply.

Suggested Citation

  • Hairault, Jean-Olivier & Chéron, Arnaud & Langot, François, 2007. "Job Creation and Job Destruction over the Life Cycle: The Older Workers in the Spotlight," IZA Discussion Papers 2597, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp2597
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    References listed on IDEAS

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    Cited by:

    1. Claudia Senik & Thierry Verdier, 2011. "Segregation, entrepreneurship and work values: the case of France," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(4), pages 1207-1234, October.
    2. Messe, P.J., 2011. "Taxation of early retirement windows and delaying retirement: The French experience," Economic Modelling, Elsevier, vol. 28(5), pages 2319-2341, September.
    3. Pierre-Jean Messe & Benedicte Rouland, 2012. "Stricter employment protection and firms’ incentives to train: The case of French older workers," TEPP Working Paper 2012-04, TEPP.
    4. Arnaud Chéron & Jean-Olivier Hairault & François Langot, 2013. "Life-Cycle Equilibrium Unemployment," Journal of Labor Economics, University of Chicago Press, vol. 31(4), pages 843-882.
    5. Michela Bia & Pierre-Jean Messe & Roberto Leombruni, 2010. "Young-in Old-out: a new evaluation," TEPP Working Paper 2010-14, TEPP.
    6. Mareva Sabatier & Bérangère Legendre, 2017. "The puzzle of older workers’ employment: distance to retirement and health effects," International Journal of Manpower, Emerald Group Publishing, vol. 38(1), pages 45-61, April.
    7. Wojciech Hardy & Aneta Kielczewska & Piotr Lewandowski & Iga Magda, 2018. "Job retention among older workers in central and Eastern Europe," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 18(2), pages 69-94.
    8. Fujimoto, Junichi, 2013. "A note on the life-cycle search and matching model with segmented labor markets," Economics Letters, Elsevier, vol. 121(1), pages 48-52.
    9. Langot, François & Moreno-Galbis, Eva, 2013. "Does the growth process discriminate against older workers?," Journal of Macroeconomics, Elsevier, vol. 38(PB), pages 286-306.
    10. Francisco Benita, 2014. "A Cohort Analysis of the College Premium in Mexico," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 51(1), pages 147-178, May.
    11. Hahn, Volker, 2009. "Search, unemployment, and age," Journal of Economic Dynamics and Control, Elsevier, vol. 33(6), pages 1361-1378, June.
    12. Cordoba, Juan C. & Isojärvi, Anni & Li, Haoran, 2020. "Equilibrium Unemployment: The Role Of Discrimination," ISU General Staff Papers 202011140800001116, Iowa State University, Department of Economics.

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    More about this item

    Keywords

    job search; matching; life cycle;
    All these keywords.

    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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