Unemployment and Delaying Retirement in A Model Based on DMP Theory
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| Title | Unemployment and Delaying Retirement in A Model Based on DMP Theory
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| Author | Yao Dongmin,Liu Zixian,Wang Youwen and Zhang Zhouchi |
| Organization | School of National Fiscal Development of Central University of Finance and Economics; Chinese Academy of Finance and Developemnt of Central University of Finance and Economics |
| Email | yaodongminn@163.com；lzx678@sina.cn；2944393755@qq.com；zzc98474@163.com |
| Key Words | DMP Model; Delaying Retirement; Unemployment Rate |
| Abstract | This paper presents a model where young and old workers compete for two types of jobs in the presence of retirement opportunity and job change. This model is based on the DMP model with some additional assumptions----two types of firms and possibility of changing jobs. We adopt the simulation method to see the impact of delaying retirement on the unemployment rate of youngsters and try to find the logic why such changes would happen. Within this framework, we show that the delaying retirement (such as an increase of the retirement age) would cause an increase of the unemployment rate of youngsters when we assume that the percentage of high technology firms is exogenous, while delaying retirement would cause a decrease of the unemployment rate of youngsters when percentage of the high technology firms is endogenous. And the wages of all workers would increase along with the delaying retirement and the adjustment and upgrading of industrial structure. In addition, delaying retirement would give an impetus to the adjustment and upgrading of industrial structure. Indeed, the number of vacancies posted by ?rms is in?uenced by the probability that an old worker is going into retirement and the percentage of high technology firms. |
| Serial Number | WP1014 |
| Time | 2016-01-08 |
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