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Declining bargaining power of workers and the rise of early retirement in Europe
Batyra, Anna; de la Croix, David; Pierrard, Olivier et al.


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13-05-Declining Bargaining Power_GIAM WP 1306.pdf
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Keywords :
Overlapping Generations; Search Unemployment; Labor Force Participation; Aging; Labor Market Policy and Institutions
Abstract :
[en] We offer an alternative explanation for the decline in labor force participation of senior workers. Typically, tax and transfer explanations have been proposed. On the contrary, a model with imperfectly competitive labor market allows to consider as well the effects of a drop in bargaining power, which would not be possible in a purely neoclassical framework. We find that a decline in the bargaining power of workers, which has taken place in the last four decades, has largely contributed to the rise in inactivity in Europe. However, we need a combination of these two explanations, along with population aging and a fall in the matching efficiency, in order to correctly reproduce the joint evolutions of other labor market variables such as the employment and unemployment rates.
Disciplines :
Macroeconomics & monetary economics
Author, co-author :
Batyra, Anna;  Galatasaray University
de la Croix, David;  Université Catholique de Louvain - UCL > IRES - Institut de Recherches Economiques et Sociales
Pierrard, Olivier;  BCL - Banque Centrale du Luxembourg
Sneessens, Henri ;  University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Center for Research in Economic Analysis (CREA)
Language :
Title :
Declining bargaining power of workers and the rise of early retirement in Europe
Publication date :
Available on ORBilu :
since 02 December 2013


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