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Gerontocracy in Motion? European Cross-Country Evidence on the Labor Market Consequences of Population Ageing


  • Fertig, Michael

    () (ISG, Cologne)

  • Schmidt, Christoph M.

    () (RWI)


Taking a European cross-country perspective, this paper addresses the most important issues in the nexus of population ageing and labor markets. We start from a descriptive overview of the demographic change currently shaping European societies. The subsequent section intensively discusses the potential consequences of these demographic processes for and interdependencies with the labor market situation in Europe. We place particular emphasis on the issue of non-competitive wage setting. In our empirical application we demonstrate that moderately large birth cohorts seem to experience lower employment rates, but also that education investments might be able to mitigate these consequences, and that the relative economic success of large cohorts might even be disproportionately positive. Finally, in the concluding section we review possible policy options for coping with the consequences of population ageing.

Suggested Citation

  • Fertig, Michael & Schmidt, Christoph M., 2003. "Gerontocracy in Motion? European Cross-Country Evidence on the Labor Market Consequences of Population Ageing," IZA Discussion Papers 956, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp956

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    1. Blanchard, Olivier & Wolfers, Justin, 2000. "The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence," Economic Journal, Royal Economic Society, vol. 110(462), pages 1-33, March.
    2. Stapleton, David C & Young, Douglas J, 1988. "Educational Attainment and Cohort Size," Journal of Labor Economics, University of Chicago Press, vol. 6(3), pages 330-361, July.
    3. Stephen Nickell, 1997. "Unemployment and Labor Market Rigidities: Europe versus North America," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 55-74, Summer.
    4. Wright, Robert E, 1991. "Cohort Size and Earnings in Great Britain," Journal of Population Economics, Springer;European Society for Population Economics, vol. 4(4), pages 295-305, November.
    5. Robert Shimer, 2001. "The Impact of Young Workers on the Aggregate Labor Market," The Quarterly Journal of Economics, Oxford University Press, vol. 116(3), pages 969-1007.
    6. Welch, Finis, 1979. "Effects of Cohort Size on Earnings: The Baby Boom Babies' Financial Bust," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 65-97, October.
    7. Richard B. Freeman, 1979. "The Effect of Demographic Factors on Age-Earnings Profiles," Journal of Human Resources, University of Wisconsin Press, vol. 14(3), pages 289-318.
    8. Daron Acemoglu, 2002. "Directed Technical Change," Review of Economic Studies, Oxford University Press, vol. 69(4), pages 781-809.
    9. Finis Welch, 1979. "Effects of Cohort Size on Earnings: The Baby Boom Babies' Financial Bust," UCLA Economics Working Papers 146, UCLA Department of Economics.
    10. James M. Poterba, 2001. "Demographic Structure And Asset Returns," The Review of Economics and Statistics, MIT Press, vol. 83(4), pages 565-584, November.
    11. Andrew B. Abel, 2001. "Will Bequests Attenuate The Predicted Meltdown In Stock Prices When Baby Boomers Retire?," The Review of Economics and Statistics, MIT Press, vol. 83(4), pages 589-595, November.
    12. Connelly, Rachel & Gottschalk, Peter, 1995. "The Effect of Cohort Composition on Human Capital Accumulation across Generations," Journal of Labor Economics, University of Chicago Press, vol. 13(1), pages 155-176, January.
    13. Dahlberg, Susanne & Nahum, Ruth-Aïda, 2003. "Cohort Effects on Earnings Profiles: Evidence from Sweden," Arbetsrapport 2003:3, Institute for Futures Studies.
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    Cited by:

    1. Elena Giarda, 2008. "The worsening of wage expectations in Italy: a study based on administrative data," International Journal of Manpower, Emerald Group Publishing, vol. 29(1), pages 64-87, March.
    2. Fertig, Michael & Schmidt, Christoph M. & Sinning, Mathias G., 2009. "The impact of demographic change on human capital accumulation," Labour Economics, Elsevier, vol. 16(6), pages 659-668, December.
    3. Paula C. Albuquerque & João C. Lopes, 2010. "Economic impacts of ageing: an inter-industry approach," International Journal of Social Economics, Emerald Group Publishing, vol. 37(12), pages 970-986, October.
    4. repec:zbw:rwirep:0107 is not listed on IDEAS
    5. Niebuhr, Annekatrin & Stiller, Silvia, 2005. "Demographischer Wandel und Arbeitsmärkte in Norddeutschland," Wirtschaftsdienst – Zeitschrift für Wirtschaftspolitik (1949 - 2007), ZBW – German National Library of Economics / Leibniz Information Centre for Economics, vol. 85(5), pages 326-332.
    6. Christoph M. Schmidt & Michael Fertig & Mathias G. Sinning, 2009. "The Impact of Demographic Change on Human Capital Accumulation," Ruhr Economic Papers 0107, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.

    More about this item


    cohort size; demographic change; unemployment;

    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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