Early-Retirement Programs and Wage Restraint: Empirical Evidence from France
Labour-force withdrawal program are an important unemployment policy instrument for certain governments in continental Europe. Two widely used interventions are government subsidised early-retirement programs and reduced working-time regulations. Most economists, however, have cast doubts concerning their efficacy in combatting unemployment, in part because the reduced labour force renders wages more resilient. The basic objective of this paper is to examine that wage-resiliency proposition using the application of the early-retirement program in France over the period 1984-1986.
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