The Age-Adjusted Unemployment Rate: An Alternative Measure

Horn, Robert N.; Heap, Philip

doi:10.1080/05775132.1999.11472081

Cited by 6 publications

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“…For example, Horn and Heap (1999) calculated age-standardized unemployment rates for the US over the period 1980 to 1997, and found that it varied relative to the standard BLS measure from .3 percent less to .5% more over this 17 year period. Perhaps this should not be surprising, because the passage of the Baby…”

Section: B Endogenous Growth and Population Agingmentioning

confidence: 99%

Macroeconomics, Aging and Growth

Lee

2016

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Inevitable population aging and slower population growth will affect the economies of all nations in ways influenced by cultural values, institutional arrangements, and economic incentives. One outcome will be a tendency toward increased capital intensity, higher wages, and lower returns on capital, a tendency partially offset when the elderly are supported by public or private transfers rather than assets, and when economies are open, in which case aging will lead to increased flows of capital and labor. Rising human capital investment per child accompanies the falling fertility that drives population aging, and partially offsets slower labor force growth. Research to date finds little effect on technological progress or labor productivity. National differences in labor supply at older ages, per capita consumption of the elderly relative to younger ages, strength of public pension and health care systems, and health and vitality of the elderly all condition the impact of population aging on the economy. Policy responses include increasing the size of the labor force, mainly by raising the retirement age; reducing benefits and/or raising taxes for public transfer programs for the elderly, with concern for dead-weight loss and the fair distribution of costs across socioeconomic classes; investing more in children to increase the quality and productivity of the future labor force; and public programs that promote fertility by facilitating market work for women with children. Ronald IntroductionAs low fertility and longer life lead to increased numbers of elderly relative to younger adults, there is increasing concern about possible macroeconomic consequences. These consequences unfold on the time scale of demographic change, which is to say not from quarter-to-quarter or year-to-year, but rather decadeto-decade. Will rising old age dependency reduce consumption per capita? Will there be a deepening of capital, and if so, will rates of return drop, leading to an "asset price meltdown"? Or will capital instead flow to the younger developing countries, so that rates of return in developed countries fall less? Might the quality of more highly educated labor effectively substitute for quantity? Will an older labor force be less productive and will innovation and technological progress slow down? Will longer-working elderly crowd out employment of the young? Has population aging already brought secular stagnation to the rich nations of the world, underlying the anemic recovery from the Great Recession and condemning their economies to recurring asset price bubbles? This chapter discusses these and related points.Samuelson (1958, 1975a) was one of the first economists to focus attention on the broader issues surrounding population growth rates, old age dependency, capital deepening, and the central role of intergenerational transfers in shaping the relations among these. A landmark paper by Cutler, Poterba, Sheiner and Summers (1990) framed and analyzed the macroeconomic issues in greater detail with more demog...

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Section: B Endogenous Growth and Population Agingmentioning

confidence: 99%

Macroeconomics, Aging and Growth

Lee

2016

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Section: Endogenous Growth and Population Agingmentioning

confidence: 99%

Macroeconomics, Aging, and Growth

Lee

2016

Handbook of the Economics of Population Aging

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“…Furthermore, the reported unemployment rate does not take into account the fact that the age and sex composition of the labor force changes over time. Horn (1988) and Horn and Heap (1999) argue that since unemployment rates vary by age and by sex, changes in the relative importance of these groups in the labor force affect comparisons of unemployment over time. Horn and Heap (1999) develop an alternative measure, called the ageadjusted unemployment rate, which controls for changes in the age and sex composition of the labor force by weighting the unemployment rate according to the respective sex and age share of the labor force in a base year.…”

Section: Introductionmentioning

confidence: 99%

“…Horn (1988) and Horn and Heap (1999) argue that since unemployment rates vary by age and by sex, changes in the relative importance of these groups in the labor force affect comparisons of unemployment over time. Horn and Heap (1999) develop an alternative measure, called the ageadjusted unemployment rate, which controls for changes in the age and sex composition of the labor force by weighting the unemployment rate according to the respective sex and age share of the labor force in a base year. They conclude that between 1970 and 1997 the reported United State's unemployment rate would have been 0.4 to 0.5 percentage points higher if the age composition of the labor force had not changed.…”

Section: Introductionmentioning

confidence: 99%

“…They conclude that between 1970 and 1997 the reported United State's unemployment rate would have been 0.4 to 0.5 percentage points higher if the age composition of the labor force had not changed. Rosnik (2010) and Szafran (2006) perform an analysis similar to Horn and Heap (1999) for the United States. Rosnik (2010) finds that the ageadjusted unemployment rate during the recent recession was higher and stayed above 10% for longer compared to the age-adjusted unemployment rate during the downturn of the early 1980s.…”

Section: Introductionmentioning

confidence: 99%

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Age, Employment and Educational Reform: An Alternative View of Unemployment in Turkey

Cavusoglu¹,

Heap²,

Horn³

2011

Ankara Üniversitesi SBF Dergisi

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Unemployment rates reported by governmental authorities do not account for changes in the age and sex composition of the labor force. However, different age groups tend to have different unemployment rates, and changes in the relative importance of these groups in the labor force will affect measures of unemployment. We apply an alternative age-adjusted unemployment rate to Turkey between 1988 and 2009, and find that if the relative composition of the labor force had not changed, the reported unemployment rate would have been as much as 10.7% higher in 2007. The main factor that has led to the lower reported unemployment rates has been the fall in the labor force participation of men and women aged 15-24. We argue that the main reasons for this change in the relative age composition of the labor force are new education laws, which have kept younger workers out of the labor force.

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The Age-Adjusted Unemployment Rate: An Alternative Measure

Cited by 6 publications

References 0 publications

Macroeconomics, Aging and Growth

Macroeconomics, Aging and Growth

Macroeconomics, Aging, and Growth

Age, Employment and Educational Reform: An Alternative View of Unemployment in Turkey

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