CEU Electronic Theses and Dissertations, 2017
| Author | Ali, Abuzar |
|---|---|
| Title | The substitutability of young and old workers |
| Summary | In this study I estimate the elasticity of substitution between young and old workers in the U.S. using Constant Elasticity of Substitution (CES) models. The current CES models in the literature impose the same elasticity of substitution between any age group pairs. My contribution to the literature is that I develop CES models that in principle allow the elasticity of substitution between young and old workers to be different from the elasticity of substitution between other age groups. Estimating these models using 1996 to 2016 March CPS data yields estimates for the elasticity of substitution between young and old workers that are lower than the elasticity of substitution between arbitrary age group pairs, implying that young and old workers are less substitutable than other age group pairs. This result contradicts the conventional wisdom that greater labor force participation of old workers leads to less favorable labor market opportunities for youth. Another result of my study is that the substitutability of young and old workers increases within more homogenous skill groups. |
| Supervisor | Kézdi, Gábor |
| Department | Economics MA |
| Full text | https://www.etd.ceu.edu/2017/ali_abuzar.pdf |
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