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Growth, PAYG pension systems crisis and mandatory age of retirement

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  • Luciano Fanti

    (Department of Economics and Management, University of Pisa)

Abstract

Since in many countries - plagued by low fertility - significant increases of the mandatory retirement age have been recently introduced with the declared objective to sustain PAYG pension budgets, then in this paper we investigate whether and how such boosts are effective. It is shown - in the basic two-period overlapping generations model of endogenous growth, which is maybe the toy-model most used for pension policy analyses - that the postponement of the retirement age may be harmful for growth and, more interestingly, for pension payments. Therefore this result suggests that the positive effects of lengthening mandatory retirement ages for sustaining PAYG pension budgets might not be warranted.

Suggested Citation

  • Luciano Fanti, 2015. "Growth, PAYG pension systems crisis and mandatory age of retirement," Economics Bulletin, AccessEcon, vol. 35(2), pages 1160-1167.
    • Handle: RePEc:ebl:ecbull:eb-14-00732
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    References listed on IDEAS

    as
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    Cited by:

    1. Cavalli, F. & Chen, H.-J. & Li, M.-C. & Naimzada, A. & Pecora, N., 2023. "Heterogeneous expectations and equilibria selection in an evolutionary overlapping generations model," Journal of Mathematical Economics, Elsevier, vol. 104(C).
    2. Cipriani, Giam Pietro & Pascucci, Francesco, 2020. "Pension policies in a model with endogenous fertility," Journal of Pension Economics and Finance, Cambridge University Press, vol. 19(1), pages 109-125, January.
    3. Edouard Ribes, 2022. "Transforming personal finance thanks to artificial intelligence: myth or reality?," Working Papers hal-03862261, HAL.
    4. Edouard Ribes, 2023. "The need for data products in personal finance," Working Papers hal-04015599, HAL.
    5. Edouard A. Ribes, 2022. "Financial planning and optimal retirement timing for physically intensive occupations," SN Business & Economics, Springer, vol. 2(8), pages 1-28, August.
    6. Edouard Ribes, 2022. "What are the financial implications of an ageing population for European citizens?," Working Papers hal-03118783, HAL.
    7. Luciano Fanti, 2015. "Environmental Standards and Cournot Duopoly: A Stability Analysis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 61(4), pages 577-593, August.
    8. Edouard Augustin Ribes, 2023. "Transforming personal finance thanks to artificial intelligence: myth or reality?," Financial Economics Letters, Anser Press, vol. 2(1), pages 11-12, April.
    9. Peter J. Stauvermann & Jin Hu, 2018. "What can China Expect from an Increase of the Mandatory Retirement Age?," Annals of Economics and Finance, Society for AEF, vol. 19(1), pages 229-246, May.

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    More about this item

    Keywords

    Retirement age; PAYG Pensions; Endogeneous OLG growth model;
    All these keywords.

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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