ABSTRACT This paper identifies and quantifies an undocumented transmission channel of Quantitative Easing (QE) policies: the financialized restructuring of senior employment. Between 2008 and 2024, G4 central banks expanded their balance sheets by over 25 trillion, compressing real interest rates to near-zero levels for more than a decade. Using a panel of 82 publicly listed firms (parent companies) across twelve countries (2005-2024) and exploiting exogenous variation in QE exposure through pre-crisis debt maturity structures, we estimate that firms in the top quartile of QE exposure increased their probability of implementing early retirement schemes for workers over age 55 by 4. 2 percentage points (a 48% increase relative to the baseline mean of 8. 7%). A calibrated discounted cash flow model using O*NET 2024 wage distributions confirms that under zero real rates, the net present value of replacing a 55-year-old senior worker exceeds €400, 000, with substantial variation across occupations (range: €185, 000 for Teaching Assistants to €1, 200, 000+ for Software Developers). Equity markets reward restructuring announcements with cumulative abnormal returns of +1. 24% to +2. 85%, with effects concentrated among high-QE-exposure firms. Each displaced senior worker generates negative fiscal externalities estimated at €142, 000 in net present value over ten years, representing an implicit transfer from the public sector to corporate shareholders. These findings reveal a novel labor liability restructuring channel of monetary policy with profound implications for fiscal sustainability and intergenerational equity. JEL Codes: E52, E58, J26, J63, G32, H55 Keywords: Quantitative Easing, Labor restructuring, Insider-Outsider theory, Early retirement, Fiscal externalities, Demographic aging, Occupational wage distribution
Alberto García-Lluis Valencia (Wed,) studied this question.