"Crowded Career Ladders? Intra-Firm Spillovers of Raised Retirement Age" is now available: www.crctr224.de/research/dis...

Link to the paper: www.cerge-ei.cz/pdf/wp/Wp810...

Feedback welcome!
#Aging #HumanCapital #InternalLaborMarkets #LaborEconomics #PersonnelEconomics #Retirement #WorkerSubstitutability

Thus, the paper opens the “black box” behind retirement spillovers and challenges the view that retaining older workers is uniformly detrimental to younger employees’ careers. Instead, the evidence supports slot-constraint mechanisms, augmented by the value of firm-specific human capital.

Promotion crowd-outs are strongest in dense internal markets with intense competition. Importantly, crowd-out effects arise mainly within occupational jobcells. Coworkers in other jobcells can even benefit when retained older workers possess firm-specific human capital.

• Spillovers are highly structured: hiring declines are concentrated in thin external labor markets where replacing workers is costly. Interpreting crowd-out estimates as substitution elasticities can be misleading w/o accounting for hiring frictions.

• The reform substantially increased the retention of older women and led firms to adjust internally: internal promotions and external hiring of younger workers declined, with the largest losses borne by middle-aged employees closest to older workers on the career ladder.

I am updating the third (and final) dissertation paper, the new version of which will be released this winter. I will show how this same reform led to intra-firm spillovers on younger worker hiring and coworker wages.

More broadly, these papers demonstrate that old-age employment is not solely an individual decision but is shaped by (1) labor demand factors that decrease the potential turnover costs for firms and (2) group‑level social norms related to old-age employment among women.

The reform operated through a dual mechanism—firms retained workers due to substitutability incentives (Paper 1: doku.iab.de/discussionpa...), while peers reinforced employment through conformity and social norms regarding old‑age employment among women (Paper 2: doku.iab.de/discussionpa...).

2/4 His research demonstrated the deep connection between labor market outcomes and firm performance, highlighting the role of incentive design and human capital investments.

4/4 He passed away during my dissertation proposal workshop, where I used his papers in motivation slides. It is unfortunate that the Nobel Prize cannot be awarded posthumously—I truly believe he deserved one.