How aging of the labor force affects equilibrium unemployment
This paper argues that aging of the labor force affects job creation and job destruction. To analyze this, we extend a standard model of equilibrium unemployment and search in the labor market by the distinction between age specific separation risks and a productivity differential between young and elderly workers. Based on the theo- retical model, we identify four regimes of changes in the Beveridge Curve and job creation which can occur if the age structure varies. We also present an econometric model to find out which country relates to which regime. According to the estimates we can identify all four cases. For example, Spain and the US may experience positive effects on employment when the labor force grows older. In contrast to this, the unemployment rate in Germany and Japan will rise as a consequence of the increase in the share of elderly workers.
|Date of creation:||2005|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.wiwi.uni-rostock.de/vwl/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- David E. Bloom & David Canning, 2004.
"Global demographic change : dimensions and economic significance,"
Proceedings - Economic Policy Symposium - Jackson Hole,
Federal Reserve Bank of Kansas City, issue Aug, pages 9-56.
- David E. Bloom & David Canning, 2004. "Global Demographic Change: Dimensions and Economic Significance," NBER Working Papers 10817, National Bureau of Economic Research, Inc.
- David E. Bloom & David Canning, 2005. "Global Demographic Change: Dimensions and Economic Significance," PGDA Working Papers 0105, Program on the Global Demography of Aging.
- Miles, David K, 1997.
"Modelling the Impact of Demographic Change Upon the Economy,"
CEPR Discussion Papers
1762, C.E.P.R. Discussion Papers.
- Miles, David, 1999. "Modelling the Impact of Demographic Change upon the Economy," Economic Journal, Royal Economic Society, vol. 109(452), pages 1-36, January.
- Acemoglu, D, 1996.
"Technology, Unemployment and Efficiency,"
96-26, Massachusetts Institute of Technology (MIT), Department of Economics.
- Coles, Melvyn G & Smith, Eric, 1994.
"Cross-Section Estimation of the Matching Function: Evidence from England and Wales,"
CEPR Discussion Papers
966, C.E.P.R. Discussion Papers.
- Coles, Melvyn G & Smith, Eric, 1996. "Cross-Section Estimation of the Matching Function: Evidence from England and Wales," Economica, London School of Economics and Political Science, vol. 63(252), pages 589-97, November.
- Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877, June.
- Barbara Petrongolo & Christopher Pissarides, 2000.
"Looking into the black box: a survey of the matching function,"
LSE Research Online Documents on Economics
2122, London School of Economics and Political Science, LSE Library.
- Christopher A. Pissarides & Barbara Petrongolo, 2001. "Looking into the Black Box: A Survey of the Matching Function," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 390-431, June.
- Barbara Petrongolo & Christopher A. Pissarides, 2000. "Looking Into the Black Box: A Survey of the Matching Function," CEP Discussion Papers dp0470, Centre for Economic Performance, LSE.
- Petrongolo, Barbara & Pissarides, Christopher, 2000. "Looking Into The Black Box: A Survey Of The Matching Function," CEPR Discussion Papers 2409, C.E.P.R. Discussion Papers.
- Oliver Jean Blanchard & Peter Diamond, 1989. "The Beveridge Curve," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 20(1), pages 1-76.
- BÃ¶rsch-Supan, Axel & DÃ¼zgÃ¼n, Ismail & Weiss, Matthias, 2005. "Altern und ProduktivitÃ¤t: Zum Stand der Forschung," MEA discussion paper series 05073, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
- Burgess, Simon M., 1994. "Matching models and labour market flows," European Economic Review, Elsevier, vol. 38(3-4), pages 809-816, April.
- Peter Batey & Moss Madden, 1999. "The employment impact of demographic change: A regional analysis," Papers in Regional Science, Springer, vol. 78(1), pages 69-87.
- van Ours, Jan C., 1995. "An empirical note on employed and unemployed job search," Economics Letters, Elsevier, vol. 49(4), pages 447-452, October.
- Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005.
"Unemployment: Macroeconomic Performance and the Labour Market,"
Oxford University Press, number 9780199279173, March.
- Layard, Richard & Nickell, Stephen & Jackman, Richard, 1991. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780198284345, March.
- Pissarides, Christopher A. & Wadsworth, Jonathan, 1994. "On-the-job search: Some empirical evidence from Britain," European Economic Review, Elsevier, vol. 38(2), pages 385-401, February.
- Friedrich Breyer & Klaus Stolte, 2000.
"Demographic Change, Endogenous Labor Supply and the Political Feasibility of Pension Reform,"
Discussion Papers of DIW Berlin
202, DIW Berlin, German Institute for Economic Research.
- Friedrich Breyer & Klaus Stolte, 2001. "Demographic change, endogenous labor supply and the political feasibility of pension reform," Journal of Population Economics, Springer, vol. 14(3), pages 409-424.
When requesting a correction, please mention this item's handle: RePEc:zbw:roswps:57. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics)
If references are entirely missing, you can add them using this form.