Youth Unemployment in the OECD: Demographic Shifts, Labour Market Institutions and Macroeconomic Shocks

Juan F Jimeno and Diego Rodríguez-Palenzuela
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Diego Rodríguez-Palenzuela: European Central Bank

No 19, Economics Working Papers from European Network of Economic Policy Research Institutes

Abstract: We use a panel of OECD countries to gauge the relevance of the relative size of the youth population, labour market institutions and macroeconomic shocks at explaining observed relative youth unemployment rates. We find that the fluctuations of the youth population size caused by the baby boom of the 1950s and 1960s and the subsequent decline of fertility in many European countries are positively associated with fluctuations in relative youth unemployment rates. We also find that some labour market institutions contribute to increase youth unemployment, and that the adjustment to macroeconomic shocks has affected relatively more to young workers than to adult workers. To motivate the effects of institutions on the relative unemployment rate of young workers, we lay out a simple theoretical model that builds on the imperfect substitutability of workers of different ages, and on the non-allocative role of (age specific) wages.

Keywords: youth unemployment; labour supply; labour market institutions (search for similar items in EconPapers)
JEL-codes: J64 (search for similar items in EconPapers)
Pages: 55 pages
Date: 2003-03
New Economics Papers: this item is included in nep-lab and nep-ltv
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Citations: View citations in EconPapers (20)

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Related works:
Working Paper: Youth unemployment in the OECD: demographic shifts, labour market institutions, and macroeconomic shocks (2002)
Working Paper: Youth unemployment in the OECD: Demographic shifts, labour market institutions, and macroeconomic shocks
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