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Title:Demography, capital flows and unemployment PDF Logo
Authors:Marchiori, Luca
Pierrard, Olivier
Sneessens, Henri R.
Issue Date:2011
Series/Report no.:Discussion Paper series, Forschungsinstitut zur Zukunft der Arbeit 6094
Abstract:This paper contributes to the already vast literature on demography-induced international capital flows by examining the role of labor market imperfections and institutions. We setup a two-country overlapping generations model with search unemployment, which we calibrate on EU15 and US data. Labor market imperfections are found to significantly increase the volume of capital flows, because of stronger employment adjustments in comparison with a competitive economy. We next exploit the model to investigate how demographic asymmetries may have contributed to unemployment and welfare changes in the recent past (1950-2010). We show that a policy reform in one country also has an impact on labor markets in other countries when capital is mobile.
Subjects:demographics
capital flows
overlapping generations
general equilibrium
unemployment
JEL:J11
F21
D91
C68
Persistent Identifier of the first edition:urn:nbn:de:101:1-201111213217
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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