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Does a higher retirement age reduce youth employment?

Author

Listed:
  • Marco Bertoni
  • Giorgio Brunello

Abstract

SUMMARYPension reforms rising minimum retirement age force some senior workers to retire later than originally expected. We evaluate the impact of a 2011 Italian reform, implemented during a recession, on youth and prime-age employment. Our research design is based on difference-in-differences and exploits the variations in the intensity of the treatment across local labour markets due to differences in the age structure of the population. We estimate that, for any 1,000 local senior workers locked into employment by the reform, local youth and prime-age employment declined by 273 (−0.86%) and 199 (−0.12%) workers, and senior employment increased by 833 (+2.70%) individuals. The estimated reduction in youth employment is broadly similar to the one induced by earlier reforms, implemented when the economy was growing. We estimate that an important part of the total employment change induced by the 2011 reform is due to higher firm turnover.

Suggested Citation

  • Marco Bertoni & Giorgio Brunello, 2021. "Does a higher retirement age reduce youth employment?," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 36(106), pages 325-372.
    • Handle: RePEc:oup:ecpoli:v:36:y:2021:i:106:p:325-372.
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    File URL: http://hdl.handle.net/10.1093/epolic/eiaa022
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    Citations

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    Cited by:

    1. Gabriele Guaitoli & Roberto Pancrazi, 2022. "Global Trends in Intergenerational Income Inequality?," LIS Working papers 828, LIS Cross-National Data Center in Luxembourg.
    2. Irene Ferrari & Jan Kabátek & Todd Morris, 2023. "Longer careers: A barrier to hiring and coworker advancement?," Working Papers 2023:06, Department of Economics, University of Venice "Ca' Foscari".
    3. Brunello, Giorgio & De Paola, Maria & Rocco, Lorenzo, 2023. "Pension Reforms, Longer Working Horizons and Absence from Work," IZA Discussion Papers 15871, Institute of Labor Economics (IZA).

    More about this item

    Keywords

    J26; H55; J21; J14; J11;
    All these keywords.

    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts

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