Too Old to Work, Too Young to Retire?: Revised Version of Working Paper 220, Economics Series, October 2007

Ichino, Andrea and Schwerdt, Guido and Winter-Ebmer, Rudolf and Zweimüller, Josef (December 2013) Too Old to Work, Too Young to Retire?: Revised Version of Working Paper 220, Economics Series, October 2007. IHS Economics Series 302

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Abstract or Table of Contents

Abstract: We study whether employment prospects of old and young workers differ after a plant closure. Using Austrian administrative data, we show that old and young workers face similar displacement costs in terms of employment in the long-run, butold workers lose considerably more initially and gain later. We interpret these findings using a search model with retirement as an absorbing state, that we calibrate to match the observed patterns. Our finding is that the dynamics of relative employment losses of old versus young workers after a displacement are mainly explained by different opportunities of transition into retirement. In contrast, differences in layoff rates and job offer arrival rates cannot explain these patterns. Our results support the idea that retirement incentives, more than weak labor demand, are responsible for the low employment rates of older workers.;

Item Type: IHS Series
Keywords: 'Aging' 'Employability' 'Plant closures' 'Matching'
Classification Codes (e.g. JEL): J14, J65
Status: Published
Date Deposited: 26 Sep 2014 10:39
Last Modified: 22 Jul 2017 14:10
URI: http://irihs.ihs.ac.at/id/eprint/2240

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