Prof. Domenico Massaro, University of Milan
Chair: Prof. Mattia Guerini, University of Brescia
When: Wednesday, January 21st, 2026, 1:30 PM
Where: Room D2, Brixia Building, via San Faustino 64
This paper examines how pandemic-induced layoffs contributed to post-Covid-19 inflation through their effects on retirement and labor supply. Using CPS microdata, we show that the unprecedented “Great Layoff” triggered a sharp rise in early retirements – the “Great Retirement” – which increased labor market tightness and nominal wages. Younger non-participants were drawn into employment, partly offsetting the loss of older workers. To quantify this mechanism, we estimate a New Keynesian model with endogenous participation and retirement. Counterfactual simulations show that the Great Retirement accounted for roughly three cumulative percentage points of inflation from 2020 to 2024, with modest GDP effects.