Life Cycle Equilibrium Unemployment

Arnaud Cheron, Jean-Olivier Hairault and Francois Langot

No 1103, CEPREMAP Working Papers (Docweb) from CEPREMAP

Abstract: This paper extends the job creation-job destruction approach to the labor market to take into account a deterministic finite horizon. As hirings and separations depend on the time over which to recoup investment costs, the life-cycle setting implies age-differentiated labor market flows. Whereas the search effort of unemployed workers presents an age-decreasing profile, the age-dynamics of the separation rate can be either decreasing or increasing. Worker heterogeneity in the context of the undirected search implies an intergenerational externality, which is not eliminated by the Hosios condition. We show that age-specific policies are necessary to reach the first best allocation.

Keywords: search; matching; retirement; life cycle (search for similar items in EconPapers)
JEL-codes: H55 J22 J26 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2011-04
New Economics Papers: this item is included in nep-age, nep-dge and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.cepremap.fr/depot/docweb/docweb1103.pdf (application/pdf)

Related works:
Journal Article: Life-Cycle Equilibrium Unemployment (2013)
Working Paper: Life Cycle Equilibrium Unemployment (2013)
Working Paper: Life Cycle Equilibrium Unemployment (2013)
Working Paper: Life-Cycle Equilibrium Unemployment (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:cpm:docweb:1103

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