Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/97438
Authors: 
Ichino, Andrea
Schwerdt, Guido
Winter-Ebmer, Rudolf
Zweimüller, Josef
Year of Publication: 
2013
Series/Report no.: 
Working Paper, Department of Economics, Johannes Kepler University of Linz 1313
Abstract: 
We study whether employment prospects of old and young workers differ after a plant closure. Using Austrian administrative data, we show that old and young workers face similar displacement costs in terms of employment in the long-run, but old workers lose considerably more initially and gain later. We interpret these findings using a search model with retirement as an absorbing state, that we calibrate to match the observed patterns. Our finding is that the dynamics of relative employment losses of old versus young workers after a displacement are mainly explained by different opportunities of transition into retirement. In contrast, differences in layoff rates and job offer arrival rates cannot explain these patterns. Our results support the idea that retirement incentives, more than weak labor demand, are responsible for the low employment rates of older workers.
Subjects: 
Aging
Employability
Plant Closures
Matching
JEL: 
J14
J65
Document Type: 
Working Paper

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