Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5067323 | European Economic Review | 2010 | 19 Pages |
Despite the relatively higher frequency of job displacement among older workers in Europe, little is known about its effect on the work-retirement decision. Employing individual data from the European Community Household Panel for a number of countries with differences in their institutional environments, the effect of job displacement for non-employed workers is identified separately for the transitions into re-employment and retirement. The findings suggest that in countries with relatively more generous unemployment insurance provisions for the older unemployed, which offer a pathway to early retirement, older displaced workers exhibit lower re-employment and higher retirement rates compared to the non-displaced. These results are robust to dynamic selection due to unobserved heterogeneity and to the endogeneity of displacement.