Reference : Aging and Pensions in General Equilibrium: Labour Market Imperfections Matter |
Scientific journals : Article | |||
Business & economic sciences : Macroeconomics & monetary economics | |||
http://hdl.handle.net/10993/5468 | |||
Aging and Pensions in General Equilibrium: Labour Market Imperfections Matter | |
English | |
de la Croix, David [Université Catholique de Louvain - UCL > IRES - Institut de recherches économiques et sociales] | |
Pierrard, Olivier [BCL - Banque centrale du Luxembourg] | |
Sneessens, Henri ![]() | |
2013 | |
Journal of Economic Dynamics and Control | |
Elsevier Science | |
37 | |
104-124 | |
Yes (verified by ORBilu) | |
International | |
0165-1889 | |
[en] Overlapping Generations ; Search Unemployment ; Labor Force Participation ; aging ; pensions ; labor market | |
[en] We re-examine the effects of population aging and pension reforms in an OLG model
with labor market frictions. The most important feature brought about by labor market frictions is the connection between the interest rate and the unemployment rate. Exogenous shocks (such as aging) leading to lower interest rates also imply lower equilibrium unemployment rates, because lower capital costs stimulate labor demand and induce firms to advertise more vacancies. These effects may be reinforced by increases in the participation rate of older workers, induced by the higher wage rates and the larger probability of finding a job. These results imply that neglecting labor market frictions and employment rate dynamics may seriously bias the evaluation of pension reforms when they have an impact on the equilibrium interest rate. | |
Researchers | |
http://hdl.handle.net/10993/5468 | |
http://www.journals.elsevier.com/journal-of-economic-dynamics-and-control/ |
File(s) associated to this reference | ||||||||||||||
Fulltext file(s):
| ||||||||||||||
All documents in ORBilu are protected by a user license.