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Releasing Jobs for the Young? Early Retirement and Youth Unemployment in the United Kingdom

In: Social Security Programs and Retirement around the World: The Relationship to Youth Employment

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  • James Banks
  • Richard Blundell
  • Antoine Bozio
  • Carl Emmerson

Abstract

This paper tries to assess whether or not we have any empirical evidence of links between early retirement and youth unemployment. Most economists would today dismiss the idea immediately as another version of the naïve 'lump-of-labor fallacy'. In its most basic form, this proposition holds that there is a fixed supply of jobs and that any reduction in labor supply will reduce unemployment by offering jobs to those who are looking for ones. Taken to the extreme, this view would support that the idea that a high level of employment of one group of individuals can only be at the expense of another group: if for instance were the population of a country to increase, younger individuals would be unemployed as older individuals would not 'release' enough jobs for the new entrants. The absurdity of this view in the long term is simply seen by considering the fact that the size of a country does not bear any relation to the share of population unemployed.
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Suggested Citation

  • James Banks & Richard Blundell & Antoine Bozio & Carl Emmerson, 2010. "Releasing Jobs for the Young? Early Retirement and Youth Unemployment in the United Kingdom," NBER Chapters, in: Social Security Programs and Retirement around the World: The Relationship to Youth Employment, pages 319-344, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberch:8261
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    References listed on IDEAS

    as
    1. Casey B. Mulligan & Xavier Sala-i-Martin, 1999. "Gerontocracy, retirement, and social security," Economics Working Papers 383, Department of Economics and Business, Universitat Pompeu Fabra.
    2. Richard Disney & Denise Hawkes, 2003. "Why Has Employment Recently Risen Among Older Workers in Britain?," Palgrave Macmillan Books, in: Richard Dickens & Paul Gregg & Jonathan Wadsworth (ed.), The Labour Market Under New Labour, chapter 4, pages 53-69, Palgrave Macmillan.
    3. Jonathan Gruber & David A. Wise, 2004. "Social Security Programs and Retirement around the World: Micro-Estimation," NBER Books, National Bureau of Economic Research, Inc, number grub04-1, June.
    4. Michael Anyadike-Danes & Duncan McVicar, 2008. "Has the Boom in Incapacity Benefit Claimant Numbers Passed Its Peak?," Fiscal Studies, Institute for Fiscal Studies, vol. 29(4), pages 415-434, December.
    5. Jonathan Gruber & David A. Wise, 2007. "Introduction to "Social Security Programs and Retirement around the World: Fiscal Implications of Reform"," NBER Chapters, in: Social Security Programs and Retirement around the World: Fiscal Implications of Reform, pages 1-42, National Bureau of Economic Research, Inc.
    6. Richard Disney & Carl Emmerson, 2005. "Public pension reform in the United Kingdom: what effect on the financial well-being of current and future pensioners?," Fiscal Studies, Institute for Fiscal Studies, vol. 26(1), pages 55-81, March.
    7. Jonathan Gruber & David A. Wise, 2007. "Social Security Programs and Retirement around the World: Fiscal Implications of Reform," NBER Books, National Bureau of Economic Research, Inc, number grub07-1, June.
    8. Tom Walker, 2007. "Why economists dislike a lump of labor," Review of Social Economy, Taylor & Francis Journals, vol. 65(3), pages 279-291.
    9. Jonathan Gruber & David A. Wise, 1999. "Social Security and Retirement around the World," NBER Books, National Bureau of Economic Research, Inc, number grub99-1, June.
    10. Richard Dickens & Paul Gregg & Jonathan Wadsworth (ed.), 2003. "The Labour Market Under New Labour," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-59845-4.
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    Cited by:

    1. Bertoni, Marco & Brunello, Giorgio, 2017. "Does Delayed Retirement Affect Youth Employment? Evidence from Italian Local Labour Markets," IZA Discussion Papers 10733, Institute of Labor Economics (IZA).
    2. Dhanjal, Sundip & Schirle , Tammy, 2014. "Workforce Aging and the Labour Market Opportunities of Youth: Evidence from Canada," CLSSRN working papers clsrn_admin-2014-30, Vancouver School of Economics, revised 16 Jun 2014.
    3. Dai, Tiantian & Fan, Hua & Liu, Xiangbo & Ma, Chao, 2022. "Delayed retirement policy and unemployment rates," Journal of Macroeconomics, Elsevier, vol. 71(C).
    4. Wels Jacques, 2014. "La politique des fins de carrière: Vers un modèle européen convergent?," ULB Institutional Repository 2013/154347, ULB -- Universite Libre de Bruxelles.

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