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Life-cycle Worker Flows and Cross-country Differences in Aggregate Employment

Author

Listed:
  • Jonathan Créchet

    (University of Ottawa)

  • Etienne Lalé

    (York University, CIRANO and IZA)

  • Linas Tarasonis

    (Bank of Lithuania and Vilnius University)

Abstract

We document how worker flows between employment, unemployment, and out of the labor force, vary by age and gender for a large panel of European countries. We develop and calibrate an extended Diamond-Mortensen-Pissarides model that captures all the salient features of these data. The model assigns a major role to the production technology in driving differences in aggregate employment, while, in contrast to Standard analyses, labor-market policies play only a secondary role. Search intensity and a laborforce participation decision are key for propagating the effects of technology across age and gender groups, and for explaining the variation in aggregate employment.

Suggested Citation

  • Jonathan Créchet & Etienne Lalé & Linas Tarasonis, 2024. "Life-cycle Worker Flows and Cross-country Differences in Aggregate Employment," Bank of Lithuania Working Paper Series 124, Bank of Lithuania.
    • Handle: RePEc:lie:wpaper:124
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    More about this item

    Keywords

    Employment; Unemployment; Labor Force Participation; Life cycle; Worker Flows; Labor Market Institutions;
    All these keywords.

    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J82 - Labor and Demographic Economics - - Labor Standards - - - Labor Force Composition

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