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The role of Institutions in Transatlantic Employment Differences: A Life-Cycle View

Our objective in this paper is to show, by adopting a life-cycle unemployment equilibrium approach, that labor market institutions such as unemployment benefits, employment protection and mandatory retirement age have an age-differentiated impact which can explain age-differentiated employment gaps between the US and French economies. Whereas the employment rates are quite similar for middle-aged workers, weaker rotations on the labor market lead to lower employment rates for younger workers. Moreover, the closer to 60 the retirement age, the lower the employment rate for workers aged between 50 and 59.