Working Paper: NBER ID: w14647
Authors: Jonathan Gruber; Kevin Milligan; David A. Wise
Abstract: This is the introduction and summary to the fourth phase of an ongoing project on Social Security Programs and Retirement Around the World. The first phase described the retirement incentives inherent in plan provisions and documented the strong relationship across countries between social security incentives to retire and the proportion of older persons out of the labor force. The second phase documented the large effects that changing plan provisions would have on the labor force participation of older workers. The third phase demonstrated the consequent fiscal implications that extending labor force participation would have on net program costs--reducing government social security benefit payments and increasing government tax revenues.\nThis volume presents the results of analyses of the relationship between the labor force participation of older persons and the labor force participation of younger persons in twelve countries. Why countries introduced plan provisions that encouraged older persons to leave the labor force is unclear. After the fact, it is now often claimed that these provisions were introduced to provide more jobs for the young, assuming that fewer older persons in the labor force would open up more job opportunities for the young. Now, the same reasoning is often used to argue against efforts in the same countries to reduce or eliminate the incentives for older persons to leave the labor force, claiming that the consequent increase in the employment of older person would reduce the employment of younger persons. The validity of such claims is addressed in this volume.
Keywords: Social Security; Retirement; Youth Employment; Labor Force Participation
JEL Codes: H3; H5; J1; J2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Increased employment of older workers (J26) | Decreased employment opportunities for younger workers (F66) |
| Older workers' employment rates (J26) | Youth employment rates (J68) |
| Older workers' employment rates (J26) | Employment rates of younger persons (J68) |
| Older workers' employment rates (J26) | Youth unemployment rates (J64) |
| Economic growth (O49) | Employment trends of older workers (J26) |
| Economic growth (O49) | Employment trends of younger workers (J21) |