The Effect of Retirement Age and Employment Strategies on the Iranian Labor Market based on the General Policies of Population

Document Type : Research/Original/Regular Article

Authors

1 Associate Professor, Department of Economics, Faculty of Economics Management and Accounting, Yazd University, Yazd, Iran

2 Assistant Professor, Department of Economics, Faculty of Humanities, Meybod University, Meybod, Iran

3 MA of Economics, Faculty of Management Economics and Accounting, Yazd University, Yazd, Iran

Abstract

The employment of different age groups is one of the main topics among the policy makers. The government has always been seeking ways in the social welfare system to provide job opportunities for the young people. One way is to change the age of retirement. The aim of this study is to investigate the effect of retirement age on employment and unemployment. The study uses the two-stage constant elasticity of substitution function and nonlinear estimation to analyze the replacement of the young labor in the Iranian labor market from 2005 to 2018 and the effect of retirement age change on the employment of different age groups. The findings indicate that the substitution rate of young labor in the Iranian labor market was 42 percent, and thus, as 100 people get retired, only 42 individuals get employed. Therefore, the policy of retirement age change was not very much influential. Also, considering the fact that the social welfare system is salary-based and its budget is based on current payment, these policies may challenge the financial sustainability of the social welfare system.

Keywords

Main Subjects

References

Agheli Kohneshahri, L., & Mohammadghafari, H. (2010). The role of early retirement on the contribution of the aged labor; the case study of Tehran. Mofid Letter, 18(78), 125-148. (Persian)
Darabi, S., & Torabi, F. (2017). Analyzing and comparing the population aging in Asian and European countries between 1950 and 2015. Salmand, 12(1), 30-43. (Persian)
Khalvandi, Z., Delangizan, S., & Khanzadi, A. (2020). The technological elements and the rise of employment in Iran: the case of manufacturing industries. Economy and Modelling, 11(1), 1-28. (Persian)
Raghfar, H., & Akbarbeigi, S. (2015). The effect of change in replacement rate of the retirement account of social welfare organization on current capital, labor supply, and saving. Journal of Economic Research and Policies, 23(75), 45-74. (Persian)
Research Center of Parliament. (2017). Early retirement law for the governmental staff. Enactments of the Parliament. (Persian)
Riazi, M. (2017). Labor market and social welfare organization: analyzing the role and status of social welfare organization in the labor market. Tehran: The Higher Institute of Research in Social Welfare. (Persian)
Statistical Center of Iran. (2018). A report on the statistics of labor force in Iran. (Persian)
Zamanzadeh, A., Ehsani, M., & Ganjali, M. (2020). Analyzing the effectiveness of financial and monetary policies on the duration of unemployment in industrial countries. Economy and Modelling, 11(3), 195-225. (Persian)
Bertoni, M., & Brunello, G. (2021). Does a higher retirement age reduce youth employment?. Economic Policy, 36(106), 325-372.
Bertoni, M., Maggi, S., & Weber, G. (2018). Work, retirement, and muscle strength loss in old age. Health Economics, 27(1), 115-128.
Böheim, R. N. (2019). The effect of early retirement schemes on youth employment. IZA World of Labor.
Fletcher, R., & Reeves, C. M. (1964). Function minimization by conjugate gradients. The Computer Journal, 7(2), 149-154.
Henningsen, A., & Henningsen, G. (2012). On estimation of the CES production function—Revisited. Economics Letters, 115(1), 67-69.
Jasmin, A. F., & Abdur Rahman, A. (2021). Does Elderly Employment Reduce Job Opportunities for Youth?
Jousten, A., Lefèbvre, M., Perelman, S., & Pestieau, P. (2010). The effects of early retirement on youth unemployment: The case of Belgium. In Social security programs and retirement around the world: The relationship to youth employment (pp. 47-76). University of Chicago Press.
Kalwij, A., Kapteyn, A., & De Vos, K. (2010). Retirement of older workers and employment of the young. De Economist, 158(4), 341-359.
Moré, J. J. (1978). The Levenberg-Marquardt algorithm: implementation and theory. In Numerical analysis (pp. 105-116). Springer, Berlin, Heidelberg.
Sato, K. (1967). A two-level constant-elasticity-of-substitution production function. The Review of Economic Studies, 34(2), 201-218.
Statistical Center of Iran. (2020). Results of the labor force census 2018.
Wijayanti, F. (2018). Younger vs. older workers in ASEAN countries: substitutes or complements?. R-Economy, 4(4), 151-157.
Quarterly Journal of The Macro and Strategic Policies
Volume 10, Issue 37 - Serial Number 1
February 2022
Pages 192-215

Files

Share

How to cite

Statistics