This paper shows that the quot;lump of laborquot; assumption fails in Italy. The direct relationship between the unemployment rate of the young and the labor force participation of the old is pro-cyclical, i.e. a higher labor force participation of the old is related to a lower unemployment rate...

This paper uses administrative data to study the retirement decisions of Italian private-sector non-agricultural employees during the period 1977-97. Our analysis tries to assess the importance of the financial incentives built into the social security system. The basic idea is very simple: at...