Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/295901 
Year of Publication: 
2024
Series/Report no.: 
IZA Discussion Papers No. 16878
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Cross-country employment differences are concentrated among women, the youth, and older individuals. In this paper, we document how worker flows between employment, unemployment, and out of the labor force vary by gender and age and contribute to aggregate employment differences across a large panel of European countries. We then build a life-cycle Diamond-Mortensen-Pissarides model capturing the salient features of our data. Key elements of the model are an extensive margin (i.e., labor force participation) and intensive margin (i.e., variable intensity) of search effort. The model attributes a major role to the production technology in driving differences in aggregate employment, while labor-market policies play a minor role. Search effort substantially amplifies the effects of technology across gender and age groups and is a prominent proximate cause of the cross-country variation in aggregate employment.
Subjects: 
employment
unemployment
labor force participation
life cycle
worker flows
labor market institutions
JEL: 
E02
E24
J21
J64
J82
Document Type: 
Working Paper

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