Munich Personal RePEc Archive

Elderly Labor and Unemployment

Watanabe, Minoru and Yasuoka, Masaya (2017): Elderly Labor and Unemployment.


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Economically developed countries are confronting the aging of society. Especially, their respective shares of elderly people among the total population in Japan are highest in the world. Moreover, the labor participation rates of older people in Japan are higher than in other OECD countries. Several reasons underlie the increased labor participation of older people in Japan. One reason is the subsidy for the labor supply of elderly people. This paper presents an examination of how this subsidization of the labor supply of elderly people affects the labor participation of young and elderly people and unemployment. As a result, in a temporary equilibrium, an increase in the subsidy raises the employment rate of elderly people. However, in a steady state in a closed economy, this subsidy has little effect on the employment rate of elderly people.

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