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Structural changes in the labor market and the rise of early retirement in Europe

Anna Batyra (), David de la Croix (), Olivier Pierrard () and Henri Sneessens ()

No 2016022, Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: The rise of early retirement in Europe is typically attributed to the European system of taxes and transfers. Contrary to a purely neoclassical framework, a model with imperfectly competitive labor market also allows to consider the effect of the bargaining power of labor and matching efficiency on preretirement. We find that lower bargaining power of workers and less efficient labor markets characterized by the declining matching efficiency have been an important determinant of early retirement in France and Germany. These structural changes, combined with early-retirement transfers and population ageing, are also consistent with the joint evolution of employment and unemployment rates, the labor share and the seniority premium.

Keywords: Overlapping Generations; Search Unemployment; Labor Force Participation; Aging; Labor Market Policy and Institutions (search for similar items in EconPapers)
JEL-codes: E24 H55 J26 J64 (search for similar items in EconPapers)
Pages: 35
Date: 2016-03-31
New Economics Papers: this item is included in nep-age, nep-dge, nep-eec, nep-eur and nep-mac
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