Shocks, Institutions and Secular Changes in Employment of Older Individuals

Richard Rogerson and Johanna Wallenius

No 28914, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Employment rates of males aged 55-64 have changed dramatically in the OECD over the last 5 decades. The average employment rate decreased by more than 15 percentage points between the mid-1970s and the mid-1990s, only to increase by roughly the same amount subsequently. One proposed explanation in the literature is that spousal non-working times are complements and that older males are working longer as a result of secular increases in labor supply of older females. In the first part of this paper we present evidence against this explanation. We then offer a new narrative to understand the employment rate changes for older individuals. We argue that the dramatic U-shaped pattern for older male employment rates should be understood as reflecting a mean reverting low frequency shock to labor market opportunities for all workers in combination with temporary country specific policy responses that incentivized older individuals to withdraw from market work.

JEL-codes: E24 J21 J26 (search for similar items in EconPapers)
Date: 2021-06
New Economics Papers: this item is included in nep-age, nep-lma and nep-mac
Note: EFG
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Citations: View citations in EconPapers (4)

Published as Richard Rogerson & Johanna Wallenius, 2022. "Shocks, Institutions, and Secular Changes in Employment of Older Individuals," NBER Macroeconomics Annual, vol 36, pages 177-216.

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Journal Article: Shocks, Institutions, and Secular Changes in Employment of Older Individuals (2022)
Chapter: Shocks, Institutions, and Secular Changes in Employment of Older Individuals (2021)
Working Paper: Shocks, Institutions and Secular Changes in Employment of Older Individuals (2021)
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