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http://hdl.handle.net/10419/34899
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| Title: | | Life-cycle equilibrium unemployment  |
| Authors: | | Chéron, Arnaud Hairault, Jean-Olivier Langot, François |
| Issue Date: | | 2008 |
| Series/Report no.: | | IZA Discussion Papers 3396 |
| Abstract: | | This paper develops a life-cycle approach to equilibrium unemployment. Workers only differ respectively to their distance from deterministic retirement. A non age-directed search equilibrium is then typically featured by increasing (decreasing) firing (hiring) rates with age and a hump-shaped age profile for employment. Because of intergenerational inefficiencies, the Hosios condition no longer achieves efficiency. We then explore the optimal age-pattern of some policy tools to restore this efficiency. The optimal profile for employment subsidies should increase with age, whereas firing taxes and hirings subsidies would have to be hump-shaped. Lastly, we examine the robustness of our results. We show that age-directed recruitment policies cannot exist in equilibrium even if it would have been ex-ante possible, and that introducing endogenous search effort of unemployed workers reinforces our main results. |
| Subjects: | | Job search matching life cycle |
| JEL: | | J22 |
| Persistent Identifier of the first edition: | | urn:nbn:de:101:1-2008031807 |
| Document Type: | | Working Paper |
| Appears in Collections: | | IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)
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