Job Creation and Job Destruction over the Life Cycle: The Older Workers in the Spotlight

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Money Macro Seminar
University of Pennsylvania

3718 Locust Walk
395 McNeil

Philadelphia, PA

United States

Joint with: Jean-Olivier Hairault, EUREQua, University of Paris I CEPREMAP and IZA, Francois Langot, GAINS, University of Le Mans,CEPREMAP a

This paper extends the job creation - job destruction approach to the labor market to take into account the life-cycle of workers. Forward looking decisions about hiring and firing depend on the time over which to recoup adjustment costs. The equilibrium is typically featured by
increasing (decreasing) firing (hiring) rates with age, and a hump-shaped age-dynamics of employment. The empirical plausibility of the model is assessed by incorporating existing age-specific labor market policies in France. Finally we show that the age-dynamics of
employment is optimal when the Hosios condition holds and we design the optimal agepattern for employment policies when this condition does not apply.

For more information, contact Vee Roberson.

Arnaud Cheron

GAINS

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