Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/85769
Authors: 
Bettendorf, Leon J.H.
Broer, D. Peter
Year of Publication: 
2003
Series/Report no.: 
Tinbergen Institute Discussion Paper 03-032/2
Abstract: 
This paper investigates the age-dependency of participation andunemployment by integrating job search with intertemporal optimizing behaviorof finitely-lived households. We find that search frictions and tax ratesdistort the decisions of older workers to a much larger extent than that ofyoung workers. This finding provides an explanation of the observed fall ofparticipation rates of elder workers as a result of the post-war increase intax rates and replacement rates. We show that the age pattern of searchunemployment does not match observed unemployment and we propose a new conceptof 'voluntary' unemployment that agrees well with observations.
Subjects: 
search frictions
labor supply
life cycle
unemployment
retirement.
JEL: 
J64
D91
J31
Document Type: 
Working Paper

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