Journal article
Wage and (Un-)Employment Effects of an Ageing Workforce



Publication Details
Authors:
Michaelis, J.; Debus, M.
Publication year:
2011
Journal:
Journal of Population Economics
Pages range:
1493-1511
Volume number:
24
ISSN:
0933-1433

Abstract
Given the empirical fact that workers of different ages are not perfect substitutes in production, this paper explores how change in the age pattern affects wages and (un)employment. We develop a general equilibrium model where wages for young and old workers are set by monopoly unions. Contrary to the common wisdom on this topic, we show that an increase in the relative number of older workers has no effect on young and old unemployment. If, however, unions attach a higher weight to the wishes of the old, the unemployment rate of the old (young) will increase (decrease). In this case we observe a redistribution of wage income from the young to the old.

Last updated on 2018-31-10 at 14:54