Demography, capital flows and unemployment

Arbeitspapier

This paper contributes to the already vast literature on demography-induced international capital flows by examining the role of labor market imperfections and institutions. We setup a two-country overlapping generations model with search unemployment, which we calibrate on EU15 and US data. Labor market imperfections are found to significantly increase the volume of capital flows, because of stronger employment adjustments in comparison with a competitive economy. We next exploit the model to investigate how demographic asymmetries may have contributed to unemployment and welfare changes in the recent past (1950-2010). We show that a policy reform in one country also has an impact on labor markets in other countries when capital is mobile.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 6094

Classification and Topics

• Classification: Wirtschaft ; Demographic Trends, Macroeconomic Effects, and Forecasts ; International Investment; Long-term Capital Movements ; Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡ ; Computable General Equilibrium Models
• Subject: demographics ; capital flows ; overlapping generations ; general equilibrium ; unemployment ; Kapitalmobilität ; Bevölkerungsentwicklung ; Arbeitslosigkeit ; Arbeitsmarktflexibilität ; Unvollkommener Markt ; Overlapping Generations ; Vergleich ; EU-Staaten ; USA

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Marchiori, Luca ; Pierrard, Olivier ; Sneessens, Henri R.
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/58644
• URN: urn:nbn:de:101:1-201111213217
• Last update: 10.03.2025, 11:44 AM CET