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Title: Substitutability Between Prime-Age and Marginal-Retirement-Age Workers

Citation Type: Miscellaneous

Publication Year: 2023

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Abstract: This study examines the substitutability between prime-age (ages 25-54) and marginal-retirement-age (ages 55-64) workers by investigating the impact of internal migration of prime-age workers across 320 U.S. Metropolitan Statistical Areas from 2002 to 2019. A 1% increase in prime-age worker inflows boosts the relative employment of prime-to marginal-retirement-age workers by 1.39%. The inflow shock reduces relative earnings by 0.18%, indicating a substitution elasticity of 7.7. Interpreted via an overlapping generations model, the inflow of prime-age workers, coupled with low substitutability, enhances the welfare of workers nearing retirement. Therefore, I emphasize that policymakers should consider not just relocating people to high-inflow areas but also reducing worker substitutability to improve the welfare of the marginal-retirement-age population.

Url: https://youngwook24.github.io/files/JMP_Youngwook Jung.pdf

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Authors: Jung, Youngwook

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Data Collections: IPUMS USA, IPUMS USA - Ancestry Full Count Data

Topics: Aging and Retirement, Labor Force and Occupational Structure

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