Demography

  • Articles

Youth bulges and youth unemployment

Youth bulges are not a major factor explaining current levels of youth unemployment

10.15185/izawol.26 26 Lam, D

by David Lam

The youth population bulge is often mentioned in discussions of youth unemployment and unrest in developing countries. But the youth share of the population has fallen rapidly in recent decades in most countries, and is projected to continue to fall. Evidence on the link between youth bulges and youth unemployment is mixed. It should not be assumed that declines in the relative size of the youth population will translate into falling youth unemployment without further policy measures to improve the youth labor market.

Redesigning pension systems

The institutional structure of pension systems should follow population developments

10.15185/izawol.51 51 Góra, M

by Marek Góra

For decades, pension systems were based on the rising revenue generated by an expanding population (demographic dividend). As changes in fertility and longevity created new population structures, however, the dividend disappeared, but pension systems failed to adapt. They are kept solvent by increasing redistributions from the shrinking working-age population to retirees. A simple and transparent structure and individualization of pension system participation are the key preconditions for an intergenerationally just old-age security system.

Fertility postponement and labor market outcomes

Postponed childbearing increases women’s labor market attachment but may reduce overall fertility

10.15185/izawol.117 117 Bratti, M

by Massimiliano Bratti

The rise in the average age of women bearing their first child is a well-established demographic trend in recent decades. Postponed childbearing can have important consequences for the mother and, at a macro level, for the country as a whole. Research has focused on the effect postponing fertility has on the labor market outcomes for mothers and on the total number of children a woman has in her lifetime. Most research finds that postponing the first birth raises a mother’s labor force participation and wages but may have negative effects on overall fertility, especially in the absence of supportive family-friendly policies.

Pension reform and couples’ joint retirement decisions

The success of policies raising the retirement age depends on people’s responsiveness to changes in pension eligibility

10.15185/izawol.142 142 Hospido, L

by Laura Hospido

Rising life expectancy and the growing fiscal insolvency of public pension systems have prompted many developed countries to raise the pension entitlement age. The success of such policies depends on the responsiveness of individuals to such changes. Retirement has increasingly become a decision made jointly by a couple rather than individually by one partner. The empirical evidence indicates that almost a third of dual-earner couples in Europe and the US coordinate their retirement decision despite age differences between partners. This joint determination of retirement has important implications for policies intended to reduce the burden of pension costs.

Does it pay to be beautiful?

Physically attractive people can earn more, particularly in customer-facing jobs, and the rewards for men are higher than for women

10.15185/izawol.161 161 Sierminska, E

by Eva Sierminska

It is a well-established view amongst economists that good-looking people have a better chance of employment and can earn more than those who are less physically attractive. A “beauty premium” is particularly apparent in jobs where there is a productivity gain associated with good looks, though this is different for women and men, and 
varies across countries. People also sort into occupations according to the relative returns to their physical characteristics; good-looking people take jobs where physical appearance is deemed important while less-attractive people steer away from them, or they are 
required to be more productive for the same wage.

Institutional long-term care and government regulation

Focus on family and portable allowances to lower the costs of institutional long-term care while monitoring its quality

10.15185/izawol.179 179 Stancanelli, E

by Elena Stancanelli

The demand for institutional long-term care is likely to remain high in OECD countries, because of longer life expectancy and falling cohabitation rates of the elderly with family members. As shortages of qualified nurses put a cap on the supply of beds at nursing homes, excess demand builds. That puts upward pressure on prices, which may not reflect the quality of the services that are provided. Monitoring the quality of nursing home services is high on the agenda of OECD governments. Enlisting feedback from family visitors and introducing portable benefits might improve quality at little extra cost.

The effects of wage subsidies for older workers

Wage subsidies to encourage employers to hire older workers are often ineffective

10.15185/izawol.189 189 Boockmann, B

by Bernhard Boockmann

Population aging in many developed countries has motivated some governments to provide wage subsidies to employers for hiring or retaining older workers. The subsidies are intended to compensate for the gap between the pay and productivity of older workers, which may discourage their hiring. A number of empirical studies have investigated how wage subsidies influence employers’ hiring and employment decisions and whether the subsidies are likely to be efficient. To which groups subsidies should be targeted and how the wage subsidy programs interact with incentives for early retirement are open questions.

Beauty pays but does investment in beauty?

Despite the large returns from an attractive appearance, the cost-effectiveness of investment in beauty is ambiguous

10.15185/izawol.198 198 Lee, S

by Soohyung Lee

Being beautiful gives a person an advantage in many settings. Attractive people earn more and have an easier time getting hired. People spend large amounts of money on goods and services to enhance their beauty. Is this enhancement worth pursuing? Research suggests that the expected improvement in beauty from these goods and services is limited. Therefore, despite the large returns from having an attractive appearance, the cost-effectiveness of investment in beauty enhancement is ambiguous. For the average person, the monetary benefits of plastic surgery, medical treatments to increase height, and expensive clothing are not worth the cost.

Does return migration influence fertility at home?

Migrants encounter different fertility norms while abroad, which they can bring back upon returning home

10.15185/izawol.204 204 Bertoli, S

by Simone Bertoli

Demographic factors in migrant-sending countries can influence international migration flows. But when migrants move across borders, they can also influence the pace of demographic transition in their countries of origin. This is because migrants, who predominantly move on a temporary basis, encounter new fertility norms in their host countries and then bring them back home. These new fertility norms can be higher or lower than those in their country of origin. So the new fertility norms that result from migration flows can either accelerate or slow down a demographic transition in migrant-sending countries.

Disability and labor market outcomes

Disability is associated with labor market disadvantage; recent evidence points to a causal relationship

10.15185/izawol.253 253 Jones, M

by Melanie Jones

In Europe, about one in eight people of working age report having a disability; that is, the presence of a long-term limiting health condition. Despite the introduction of a range of legislative and policy initiatives designed to eliminate discrimination and facilitate retention of and entry into work, disability is associated with substantial and enduring employment disadvantages. Identifying the reasons for this is complex, but critical to determine effective policy solutions that reduce the social and economic costs of disability disadvantage.

Do youths graduating in a recession incur permanent losses?

Penalties may last ten years or more, especially for high-educated youth and in rigid labor markets

10.15185/izawol.281 281 Cockx, B

by Bart Cockx

The Great Recession that began in 2008–2009 dramatically increased youth unemployment. But did it have long-lasting, adverse effects on the careers of youths? Are cohorts that graduate during a recession doomed to fall permanently behind those that graduate at other times? Are the impacts different for low- and high-educated individuals? If recessions impose penalties that persist over time, then more government outlays are justified to stabilize economic activity. Scientific evidence from a variety of countries shows that rigid labor markets can reinforce the persistence of these setbacks, which has important policy implications.

Where do immigrants retire to?

Immigrants’ retirement decisions can greatly affect health care and social protection costs

10.15185/izawol.297 297 De Coulon, A

by Augustin De Coulon

As migration rates increase across the world, the choice of whether to retire in the host or home country is becoming a key decision for up to 15% of the world’s population, and this proportion is growing rapidly. Large waves of immigrants who re-settled in the second half of the 20th century are now beginning to retire. Although immigrants’ location choice at retirement is an area that has barely been studied, this decision has crucial implications for health care and social protection expenditures, both in host and origin countries.