Seminar by Francesco D'Amuri

Aula della Scuola di Dottorato, Palazzo Cà Borin, Via del Santo 22 - ore 12.30


Aging workforce, pension reform, and firm's dynamics

Seminar by Francesco D'Amuri, Banca d'Italia

(with Francesca Carta, Banca d'Italia e Till von Wachter, UCLA)

The Italian institutional setting provides no incentives for workers to postpone retirement after having reached pension eligibility. Using a unique matched employer, employee, balance sheet dataset covering relatively large firms, we exploit a number of pension eligibility reforms taking place in Italy as an exogenous shifter for the presence of older workers at the firm level. An unexpectedly higher share of elderly workers implies in the short run: i) A positive impact on youth employment, and no impact on the middle-aged, ii) a slight negative impact on average wages (concentrated among the elderly), iii) an increase in investment and value added, but not in per-worker terms, iv) an increase in total sales, and a decrease in prices. In this specific context, these results provide evidence for the presence of i) a moderate degree of wage flexibility, ii) complementarity between workers increasing with age di differences, iii) Capital labor complementarity iv) some degree of market power.