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Author Chéron, Arnaud ♦ Hairault, Jean-Olivier ♦ Langot, François
Source EconStor
Content type Text
Publisher Institute for the Study of Labor (IZA)
File Format PDF
Language English
Subject Domain (in DDC) Social sciences ♦ Economics
Subject Keyword Job search ♦ matching ♦ life cycle ♦ Theorie der Arbeitslosigkeit ♦ Lebenszyklus ♦ Arbeitsuche ♦ Arbeitsnachfrage ♦ Matching ♦ Arbeitsmarktpolitik ♦ Altersgruppe ♦ Theorie ♦ OECD-Staaten ♦ Time Allocation and Labor Supply
Abstract This paper develops a life-cycle approach to equilibrium unemployment. Workers only differ respectively to their distance from deterministic retirement. A non age-directed search equilibrium is then typically featured by increasing (decreasing) firing (hiring) rates with age and a hump-shaped age profile for employment. Because of intergenerational inefficiencies, the Hosios condition no longer achieves efficiency. We then explore the optimal age-pattern of some policy tools to restore this efficiency. The optimal profile for employment subsidies should increase with age, whereas firing taxes and hirings subsidies would have to be hump-shaped. Lastly, we examine the robustness of our results. We show that age-directed recruitment policies cannot exist in equilibrium even if it would have been ex-ante possible, and that introducing endogenous search effort of unemployed workers reinforces our main results.
Part of series IZA Discussion Papers x3396
Learning Resource Type Article
Publisher Date 2008-01-01
Publisher Place Bonn
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