Abstract:This 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.NBER Working Paper No. 14647, January, 2009: Abstract/Paper.
Abstract: On the production side of the economy, younger and older workers can in theory be either substitutes or complements. For example, if there are important gains from sharing knowledge, training, or combining experience levels to produce output, then older and younger workers may be complements. On the other hand, if there is little substantive difference between workers of different ages, then older and younger workers may be substitutes. It is important to keep in mind, however, that a large change in the supply of older workers can also have an impact on the demand for output, meaning that the number of jobs in the economy will change as well, not just the identity of who fills them. In previous work, we have investigated the strength of the fiscal incentives to retire (Gruber 1999), estimated their impact on retirement decisions (Baker, Gruber, and Milligan 2004), and simulated the impact of reforms on elderly labor force behavior (Baker, Gruber, and Milligan 2007). In this paper, we build on this existing work by 2examining the impact of the previously-studied long-run trends in elderly labor market behavior on younger workers.Pre-publication draft, July, 2008: PDF.
Abstract: In this paper, we investigate the extent of such "crowding out" in the U.S. over time. We begin by documenting time series trends in labor supply by age group. We then turn to a more formal regression analysis of those trends. Finally, we develop a measure of the variation over time in the incentives for retirement of the elderly, and relate that to the labor supply of both the elderly and younger workers. Overall, our data suggests little substitution across these groups.Pre-publication draft, July, 2008: PDF.