Social security, labor force participation of old workers and unemployment of young people

Several years ago Professors Gruber and Wise started a Project aimed at understanding the impact of social security programs in workers incentives in developed economies. The first three stages of the Project were published and widely spread in academic forums. The first stage provided strong evidence of the effect that social security provisons for retirement have on labor market participation incentives; the second stage, based on microdata, show how changes in the provisions changed the decision of workers to participate in labor markets. The third stage demonstrated the consequent fiscal implications that extending labor force would have on net program cost. Recently the authors have released the papers concerning the fourth step of the Project. In this step, country based studies test whether a relationship between elders labor force participation and job opportunities for young workers exist. The unemployment of young workers is an important concern for public policy makers, understanding deeply any of its causes is an important step in order to design social security programs that foster employment opportunities for young populations. The Project of the professors is in this context of great interest. To read a summary click here