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Does Delayed Retirement Affect Youth Employment? Evidence from Italian Local Labour Markets

Author

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  • Bertoni, Marco

    (University of Padova)

  • Brunello, Giorgio

    (University of Padova)

Abstract

Pension reforms that raise minimum retirement age increase the pool of senior individuals aged 50+ who are not eligible to retire from the labour market. Using data from Italian provinces and regions and an instrumental variable strategy, we estimate the effects of local changes in the supply of workers aged between 50 and minimum retirement age on youth, prime age and senior employment. Results based on provincial data from 2004 to 2015, a period characterized by declining real GDP, indicate that adding one thousand additional senior individuals to the local labour supply reduces employment in the age group 16-34 by 189 units. Estimates based on longer regional data covering the period 1996 to 2015, that includes also a period of growing real GDP, show smaller negative effects for young workers, suggesting that the employment costs of pension reforms may be lower when the economy is growing.

Suggested Citation

  • 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).
    • Handle: RePEc:iza:izadps:dp10733
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    Cited by:

    1. Nguyen, Cuong, 2019. "Simulation of the Costs and Benefits of Delayed Retirement: Evidence from Vietnam," MPRA Paper 106180, University Library of Munich, Germany.
    2. Rutten, Albert & van Vuuren, Daniël & Knoef, Marike, 2022. "Employment Effects of Incentivized Gradual Retirement Plans," Other publications TiSEM 37eba9e7-b6ff-4f31-9c42-3, Tilburg University, School of Economics and Management.
    3. Roberto Gabriele & Enrico Tundis & Enrico Zaninotto, 2018. "Ageing workforce and productivity: the unintended effects of retirement regulation in Italy," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 35(1), pages 163-182, April.
    4. Renata Bottazzi & Serena Trucchi & Matthew Wakefield, 2021. "Labour supply responses to financial wealth shocks: evidence from Italy," Fiscal Studies, John Wiley & Sons, vol. 42(2), pages 291-317, June.
    5. Walwei, Ulrich & Deller, Jürgen, 2021. "Labor Market Participation of Older Workers in International Comparison," IAB-Discussion Paper 202116, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    6. Ainoa Aparicio Fenoll, 2020. "The uneven impact of women's retirement on their daughters' employment," Review of Economics of the Household, Springer, vol. 18(3), pages 795-821, September.
    7. Ulrich Walwei & Jürgen Deller, 2021. "Labour Market Participation of Older Workers: Drivers and Obstacles," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 56(6), pages 341-347, November.

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    More about this item

    Keywords

    local labour markets; pension reforms; lump of labour; youth employment;
    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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