DP7490 Does the welfare state make older workers unemployable?

Author(s): Gilles Saint-Paul
Publication Date: October 2009
Keyword(s): employment, employment protection, labor market institutions, older workers, pensions, retirement, welfare state
JEL(s): J23, J24, J26, J31
Programme Areas: International Macroeconomics, Labour Economics
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=7490

This paper discusses the specificities of the labor market for older workers. It discusses the implications of those specificities for the effect of labor market institutions on the employability of those workers. It shows that while unemployment benefits indexed backwards and hiring costs are likely to harm these workers more than the average worker, the converse is true for employment protection, provided it is uniform across workers and not specifically higher for older workers. It provides some evidence on the impact of labor market institutions on older workers by comparing their outcome in the United States and France. It discusses how the welfare state can be reformed in order to improve outcomes for older workers.