Discussion Paper Details

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Title: Ageing and Unemployment

Author(s): Christoph M Schmidt

Publication Date: August 1992

Keyword(s): Ageing, Cohort Size, Cointegration, Migration, Unemployment and Unions

Programme Area(s): Human Resources

Abstract: While ageing is accepted as a major problem for most industrialized societies, its labour market consequences are not yet fully understood. This paper analyses the effects of changes in the age composition of the Federal Republic of Germany on the incidence of unemployment in different sex-age groups. The German population has aged substantially in recent decades because of declining fertility and a halt in guestworker recruitment. The German wage-setting process appears to be characterized by the presence of a strong union movement that hampers flexible wage adjustments. Thus, age structure variations can be expected to lead to fluctuations in age-specific unemployment rates. In general, this intuition is confirmed by the estimations presented here. A strong positive relationship between the size of a cohort and its relative unemployment experience can only be established formally for a few sex-age groups, however.

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Bibliographic Reference

Schmidt, C. 1992. 'Ageing and Unemployment'. London, Centre for Economic Policy Research.