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Early retirement and employment of the young

Author

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  • Adriaan Kalwij

    (Utrecht School of Economics, Utrecht University and Networks for Studies on Pensions, Aging and Retirement, Tilburg University)

  • Arie Kapteyn

    (RAND)

  • Klaas de Vos

    (CentERdata, Tilburg University)

Abstract

Policy makers have often argued that an additional benefit of facilitating early retirement is that it creates employment for the young. This may happen if older and younger workers are substitutes. Nowadays policy makers’ goals are to discourage early retirement to counter the economic consequences of an aging population and, interestingly, the consequences for youth employment appear to play no role in this. This paper studies the nexus between employment of older and younger workers in more depth, if only to put any concerns for adverse effects of later retirement to rest. To empirically investigate this issue we estimate a dynamic model of employment of the young, prime age and old people using panel data of 22 OECD countries over the time period 1960-2004. Our empirical analysis does not support the hypothesis that employment of the young and old are substitutes and finds some minor complementarities. This suggests that discouraging early retirement will have no adverse effect on youth employment.

Suggested Citation

  • Adriaan Kalwij & Arie Kapteyn & Klaas de Vos, 2009. "Early retirement and employment of the young," Working Papers 200948, Geary Institute, University College Dublin.
  • Handle: RePEc:ucd:wpaper:200948
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    Cited by:

    1. Bruno Contini, 2009. "Youth Employment in Europe: Institutions and Social Capital Explain Better than Mainstream Economics," LABORatorio R. Revelli Working Papers Series 97, LABORatorio R. Revelli, Centre for Employment Studies.
    2. Zhang, Chuanchuan, 2012. "延迟退休年龄会挤出年轻人就业吗?
      [Will Postponing Retirement Crowd out Youth Employment?]
      ," MPRA Paper 49811, University Library of Munich, Germany, revised Nov 2012.
    3. Bruno Contini, 2012. "Youth employment in Europe: do institutions and social capital explain better than mainstream economics?," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 9(2), pages 247-277, August.
    4. Zhang, Chuanchuan, 2012. "The relationship between elderly employment and youth employment: evidence from China," MPRA Paper 37221, University Library of Munich, Germany.
    5. Frank van Erp & Niels Vermeer & Daniel van Vuuren, 2013. "Non-financial determinants of retirement," CPB Discussion Paper 243, CPB Netherlands Bureau for Economic Policy Analysis.

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