Social Security, Retirement, and Employment of the Young in Denmark

Paul Bingley, Nabanita Datta Gupta and Peder J. Pedersen

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:
Social Security, Retirement, and Employment of the Young in Denmark

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The demographic prospects in Denmark are characterized by an increasing share of elderly people, that is until the middle of the century. A major part of the trend toward earlier retirement is, apart from the impact from higher incomes and wealth, explained by the introduction of programs for early retirement, either directly or by expanding other retirement programs with an early retirement option, intended to reduce youth unemployment and increase welfare for eligible older workers retiring through these programs. The purpose of this chapter is to study the eventual evidence for or against this substitution hypothesis over the thirty years up to the turn of the century, using micro data for employment, unemployment, and enrollment in education for different age groups in the Danish economy. The regression results suggest that if anything, young workers are complements for the elderly in Denmark because youth employment tends to rise and fall together with elderly employment. For prime age workers, on the other hand, both employment and unemployment tend to rise with elderly employment, but this is most likely driven by the secular increase in female labor force participation over the period, bringing more prime aged workers into the labor market.

Keywords: Denmark; Danish economy; retirement; youth; employment

Chapter.  5823 words.  Illustrated.

Subjects: Public Economics

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