Youth Unemployment in the OECD: Demographic Shifts, Labour Market Institutions, and Macroeconomic Shocks

By J. F. Jimeno, Diego Rodríguez-Palenzuela. Social Science Research Network, 2002

167 citations recorded by the source corpus.

We use a panel of OECD countries to gauge the relevance of the relative size of the youth population, labour market institutions and macroeconomic shocks at explaining observed relative youth employement rates. We find that the fluctuations of the youth population size caused by the baby boom of the 1950s and 1960s and the subsequent decline of fertility in many European countries are positivily associated with fluctuations in relative youth unemployment rates. We also find that some labour market institutions contribute to increase yout unemployment, and that the adjustment to macroeconomic shocks has affected relatively more to young workers than to adult workers. To motivate the effects of institution on the relative unemployment rate of young workers, we lay out a simple theoretical model that builds on the imperfect substitutability of workers of different ages, and on the non-allocative role of (age specific) wages. JEL Classification: J64

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/a59d82886fa84296ff45c0e0bf0bd62305041593

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Citations in the corpus

The Low Fertility Trap Hypothesis: Forces that May Lead to Further Postponement and Fewer Births in Europe (2006, background): “Jimeno and Rodriguez-Palenzuela (2002) analyse OECD data and find that the relation between cohort size and unemployment is evident mostly when labour markets are rigid.”
Youth unemployment and active labor market policies in Europe (2016, methodology): “A meta-analysis of European ALMP evaluation studies up to the year 2000 is provided by Kluve et al. (2002) who find that youth tend to benefit less from ALMP participation than adults.”
Labor market policies and IMF advice in advanced economies during the Great Recession (2013, unknown): “8Evidence on the negative effect of employment protection on the employment of these subgroups is discussed in Bertola, Blau, and Kahn (2007); Betcherman (2012); Jimeno and Rodríguez-Palenzuela (2002); and Organisation for Economic Cooperation and Development (OECD) (2004, 2006).”
Demographic and Education Effects on Unemployment in Europe: Economic Factors and Labour Market Institutions (2005, background): “Similarly another strand of literature has tried to investigate the effects of supply (the “education boom”) and demand shocks (skill biased technological progress) on both unemployment and earnings (EU-Irs, 2000; Bertola et al, 2002a; Brunello et al., 2000; Flinn, 1993).”
This Time It's Different? Youth Labour Markets during ‘The Great Recession’ (2012, background): “9 Jimeno and Rodriguez-Palenzuela (2002) and Bertola et al. (2007) find a role for unionization rates in reducing youth employment; the former attribute this to wage compression, whilst the latter argue rather more convincingly that unions bargain to protect their core members, prime age males, and…”
Spanish Unemployment: The End of the Wild Ride? (2003, unknown): “As Layard (1990) once stated, any convincing story for Spanish unemployment must account for the difference with Portugal.”