Chapter

Introduction and Summary

Jonathan Gruber, Kevin Milligan and David A. Wise

in Social Security Programs and Retirement around the World

Published by University of Chicago Press

Published in print April 2010 | ISBN: 9780226309484
Published online February 2013 | e-ISBN: 9780226309507 | DOI: http://dx.doi.org/10.7208/chicago/9780226309507.003.0001
Introduction and Summary

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The number of older persons in any demographic group has increased very rapidly relative to the number of younger persons and this trend will continue. Thus, the proportion of retirees has increased relative to the number of employed persons who must pay for the benefits of those who are retired. It is now often claimed that these provisions were introduced to provide more jobs for the young, assuming that fewer older persons in the labor force would open up more job opportunities for the young. This chapter addresses the validity of such claims. It presents the results of analyses of the relationship between the labor force participation of older persons and the labor force participation of younger persons in twelve countries. The proposition that more work by older persons reduces the job opportunities for younger persons is put forth in many different forms. It is sometimes referred to by economists as the “lump of labor” theory. It states that if an additional older worker is employed, one younger worker must be displaced. The implication is that economies are boxed and that the box cannot be enlarged.

Keywords: older persons; retirees; work; claims; job opportunities; economies; labor force

Chapter.  12107 words.  Illustrated.

Subjects: Public Economics

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