The relationship between youth employment and older persons' employment in 20 OECD countries

Abstract

Inspired by the “lump of labour” theory, a large number of OECD countries have encouraged the expansion of early retirement policies in response to rising unemployment since the 1970s. In reality, however, youth employment is found to be positively correlated with older persons' employment, although this is simply the overall finding for all OECD countries because most studies estimate average effects. Less is known about diversity in the relationship between youth employment and the employment of older workers. In order to help fill the research gap in this area, this study explores the heterogeneity of that relationship across 20 OECD countries.