Does the growth process discriminate against older workers?

Francois Langot and Eva Moreno-Galbis
Authors registered in the RePEc Author Service: Eva Moreno Galbis

Journal of Macroeconomics, 2013, vol. 38, issue PB, 286-306

Abstract: This paper seeks to gain insights on the relationship between growth and employment when considering heterogeneous agents in terms of their working horizon. Using an OECD database, our empirical estimations suggest that growth positively influences the employment rate of workers having a long working horizon (young workers) while negatively influences the employment rate of workers having a short working horizon (senior workers). We then provide theoretical foundations to this result by means of an endogenous job destruction framework à laMortensen and Pissarides (1998) where we introduce life cycle features. We show that, under the assumption of homogeneous productivity among workers, growth negatively affects the employment rate of workers having a short working horizon before retirement (senior workers) while it positively affects the employment rate of workers having a long working horizon (young workers). Numerical simulations confirm these results, however a non-standard calibration is required to reproduce the elasticity values obtained in our empirical estimations.

Keywords: TFP growth; Working horizon; Old workers’ employment rate; Capitalization; Creative destruction effect (search for similar items in EconPapers)
JEL-codes: J14 J24 J26 O33 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Related works:
Working Paper: Does the Growth Process Discriminate against Older Workers? (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jmacro:v:38:y:2013:i:pb:p:286-306

DOI: 10.1016/j.jmacro.2013.09.021

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