Shocks, Institutions, and Secular Changes in Employment of Older Individuals

Richard Rogerson, Johanna Wallenius

Research output: Chapter in Book/Report/Conference proceedingChapter

1 Scopus citations

Abstract

Employment rates of males ages 55–64 have changed dramatically in the Organization for Economic Cooperation and Development over the last 5 decades. The average employment rate decreased by more than 15 percentage points between the mid-1970s and the mid-1990s, only to increase by roughly the same amount subsequently. One proposed explanation in the literature is that spousal nonworking times are complements and that older males are working longer as a result of secular increases in labor supply of older females. In the first part of this paper, we present evidence against this explanation. We then offer a new narrative to understand the employment rate changes for older individuals.We argue that the dramatic U-shaped pattern for older male employment rates should be understood as reflecting a mean reverting low frequency shock to labor market opportunities for all workers in combination with temporary country-specific policy responses that incentivized older individuals to withdraw from market work.

Original languageEnglish (US)
Title of host publicationNBER Macroeconomics Annual
PublisherUniversity of Chicago Press
Pages177-216
Number of pages40
Edition1
DOIs
StatePublished - 2022

Publication series

NameNBER Macroeconomics Annual
Number1
Volume36
ISSN (Print)0889-3365
ISSN (Electronic)1537-2642

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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