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DISCUSSION PAPER PI-1503

Does the professional activity of older workers contribute to youth unemployment? A cross-section study of European countries1

Filip Chybalski, Edyta Marcinkiewicz

Considering the most recent changes in the pension systems in Europe, this article aims to evaluate whether there is any relationship between the employment rates of older cohorts and the employment and unemployment rates in the youngest cohorts of a productive age. Its key finding is that there is no evidence that would indicate that the lower professional activity of older people is accompanied by higher employment and lower unemployment among young people. On the contrary, the study reveals that the higher the labour force participation among the elderly, the better the situation for young cohorts in the labour market. As demonstrated by the results of our empirical research, factors such as unfavourable demographics and the inefficiency of government policy aiming at stimulating the development of the labour market influence the prospects of young people entering this market.

Keywords: Retirement, youth unemployment, labour market, cross-country analysis, pension system.