Age-Specific Labour Market Effects of Employment Protection: A Numerical Approach

Stefan Boeters

Computational Economics, 2016, vol. 48, issue 2, No 5, 305 pages

Abstract: Abstract The particular situation of the youngest and oldest individuals on the labour market motivates age-specific labour market analysis. One topical case is employment protection for older workers. The effect of employment protection on the total number of jobs is ambiguous. The positive effect of lower job destruction is counteracted by the negative effect of lower job creation. This ambiguity carries over to the more specific case of age-related employment protection. Numerical analysis can be illuminating when countervailing effects produce an ambiguity. In this paper, I present a numerical model based on the theoretical set-up of Chéron et al. (Econ J 121:1477–1504, 2011). Simulations performed with the model highlight age-specific effects of general employment protection measures and effects of measures targeted at particular age-groups on workers outside the target group. Firing taxes and hiring subsidies have age-specific consequences because employment and unemployment rates vary over the lifecycle. Positive effects of employment protection for the target group can be outweighed by negative effects for other workers.

Keywords: Age-specific labour markets; Matching model of unemployment; Lifecycle effects; Retirement; Older workers; End-game effect (search for similar items in EconPapers)
JEL-codes: J21 J63 J64 (search for similar items in EconPapers)
Date: 2016
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Working Paper: Age-Specific Labour Market Effects of Employment Protection - A numerical approach (2014)
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DOI: 10.1007/s10614-015-9519-2

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