Macroeconomic implications of early retirement in the public sector: The case of Brazil
AbstractIn Brazil generous public sector pensions have induced civil servants to retire on average at age 55. In this paper we use an OLG model to assess the effects of such policy induced early retirement on capital accumulation and long-run income levels. We calibrate the model to data from Brazil and then conduct policy experiments changing the generosity of (early) public sector pensions. We find that the current generosity of public sector pensions which induces civil servants to retire 10 years prematurely (at age 55 rather than at age 65) is often associated with decreases in steady state output (GDP) of over 2 percent and welfare losses in the private sector of more than 1 percent of consumption.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Dynamics and Control.
Volume (Year): 33 (2009)
Issue (Month): 4 (April)
Contact details of provider:
Web page: http://www.elsevier.com/locate/jedc
Early retirement Pension reform Public sector retirement Capital accumulation;
Other versions of this item:
- Gerhard Glomm & Juergen Jung & Chung Tran, 2006. "Macroeconomic Implications of Early Retirement in the Public Sector: The Case of Brazil," Caepr Working Papers 2006-008, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington.
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Barro, Robert J, 1990.
"Government Spending in a Simple Model of Endogenous Growth,"
Journal of Political Economy,
University of Chicago Press, vol. 98(5), pages S103-26, October.
- Barro, R.J., 1988. "Government Spending In A Simple Model Of Endogenous Growth," RCER Working Papers 130, University of Rochester - Center for Economic Research (RCER).
- Robert J. Barro, 1988. "Government Spending in a Simple Model of Endogenous Growth," NBER Working Papers 2588, National Bureau of Economic Research, Inc.
- Barro, Robert J., 1990. "Government Spending in a Simple Model of Endogeneous Growth," Scholarly Articles 3451296, Harvard University Department of Economics.
- Tryggvi Thor Herbertsson, 2001. "Shrinking Labour Forces and Early Retirement," CESifo Forum, Ifo Institute for Economic Research at the University of Munich, vol. 2(4), pages 31-37, October.
- Cremer, Helmuth & Pestieau, Pierre, 2002.
"The Double Dividend of Postponing Retirement,"
IDEI Working Papers
144, Institut d'Économie Industrielle (IDEI), Toulouse, revised 2003.
- Hans Fehr & Wenche Irén Sterkeby & Øystein Thøgersen, 2003.
"Social security reforms and early retirement,"
Journal of Population Economics,
Springer, vol. 16(2), pages 345-361, 05.
- Fehr, H. & Sterkeby, W.I. & Thogersen, O., 2000. "Social Security Reforms and Early Retirement," Papers 16/00, Norwegian School of Economics and Business Administration-.
- Fehr, Hans & Sterkeby, Wenche I. & Thøgersen, Øystein, 2000. "Social security reforms and early retirement," W.E.P. - WÃ¼rzburg Economic Papers 24, University of Würzburg, Chair for Monetary Policy and International Economics.
- Ahituv, Avner & Zeira, Joseph, 2000.
"Technical Progress and Early Retirement,"
CEPR Discussion Papers
2614, C.E.P.R. Discussion Papers.
- Ahituv, Avner & Zeira, Joseph, 2002. "Technical Progress and Early Retirement," Working Paper Series rwp02-007, Harvard University, John F. Kennedy School of Government.
- Avner Ahituv & Joeph Zeira, . "Technical Progress and Early Retirement," Working Papers 0801, University of Crete, Department of Economics.
- Ferreira, Francisco H. G. & Lanjouw, Peter & Neri, Marcelo Cortes, 2002.
"A Robust Poverty Profile for Brazil Using Multiple Data Sources,"
Economics Working Papers (Ensaios Economicos da EPGE)
444, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
- Francisco H. G. Ferreira & Peter Lanjouw & Marcelo Côrtes Neri, 2003. "A Robust Poverty Profile for Brazil Using Multiple Data Sources," Revista Brasileira de Economia, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil), vol. 57(1), pages 59-92, January.
- John Rust & Christopher Phelan, 1994.
"How Social Security and Medicare Affect Retirement Behavior in a World of Incomplete Markets,"
9406005, EconWPA, revised 06 Jul 1994.
- John Rust & Christopher Phelan, 1997. "How Social Security and Medicare Affect Retirement Behavior in a World of Incomplete Markets," Econometrica, Econometric Society, vol. 65(4), pages 781-832, July.
- Luisa Fuster & Ayse Imrohoroglu & Selahattin Imrohoroglu, 2005. "Personal Security Accounts and Mandatory Annuitization in a Dynastic Framework," CESifo Working Paper Series 1405, CESifo Group Munich.
- David A. Wise, 2005. "Facing the age wave and economic policy: fixing public pension systems with healthcare in the wings," Fiscal Studies, Institute for Fiscal Studies, vol. 26(1), pages 5-34, April.
- André Portela Souza & Hélio Zylberstajn & Luís Eduardo Afonso & Priscilla Matias Flori, 2004. "Fiscal Impacts Of Social Security Reform In Brazil," Anais do XXXII Encontro Nacional de Economia [Proceedings of the 32th Brazilian Economics Meeting] 138, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
- Herwig Immervoll & Horacio Levy & José Ricardo Nogueira & Cathal O´Donoghue & Rozane Bezerra de Siqueira, 2005.
"The Impact of Brazil´s Tax-Benefit System on Inequality and Poverty,"
Ibero America Institute for Econ. Research (IAI) Discussion Papers
117, Ibero-America Institute for Economic Research.
- Immervoll, Herwig & Levy, Horacio & Nogueira, José Ricardo & O'Donoghue, Cathal & Siqueira, Rozane Bezerra de, 2006. "The Impact of Brazil's Tax-Benefit System on Inequality and Poverty," IZA Discussion Papers 2114, Institute for the Study of Labor (IZA).
- Herbertsson, Tryggvi Thor & Orszag, Mike, 2003. "The Early Retirement Burden: Assessing the Costs of the Continued Prevalence of Early Retirement in OECD Countries," IZA Discussion Papers 816, Institute for the Study of Labor (IZA).
- MICHEL, Philippe & PESTIEAU, Pierre, 1999.
"Social security and early retirement in an overlapping-generations growth model,"
CORE Discussion Papers
1999051, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Philippe Michel & Pierre Pestieau, 2013. "Social Security And Early Retirement In An Overlapping-Generations Growth Model," Annals of Economics and Finance, Society for AEF, vol. 14(2), pages 723-737, November.
- Ugo Panizza, 2001. "Public Sector Wages and Bureaucratic Quality: Evidence from Latin America," JOURNAL OF LACEA ECONOMIA, LACEA - LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION.
- Jonathan Gruber & David A. Wise, 1999. "Introduction to "Social Security and Retirement around the World"," NBER Chapters, in: Social Security and Retirement around the World, pages 1-35 National Bureau of Economic Research, Inc.
- repec:fth:louvco:9951 is not listed on IDEAS
- Ferreira, Pedro Cavalcanti Gomes & Nascimento, Leandro Gonçalves do, 2005. "Welfare and Growth Effects of Alternative Fiscal Rules for Infrastructure Investment in Brazil," Economics Working Papers (Ensaios Economicos da EPGE) 604, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
- Laitner, John, 1984. "Transition time paths for overlapping-generations models," Journal of Economic Dynamics and Control, Elsevier, vol. 7(2), pages 111-129, May.
- Richard Blundell & Costas Meghir & Sarah Smith, 2002. "Pension Incentives and the Pattern of Early Retirement," Economic Journal, Royal Economic Society, vol. 112(478), pages C153-C170, March.
- Marcos Bonturi, 2002. "The Brazilian Pension System: Recent Reforms and Challenges Ahead," OECD Economics Department Working Papers 340, OECD Publishing.
- Huggett, Mark, 1996. "Wealth distribution in life-cycle economies," Journal of Monetary Economics, Elsevier, vol. 38(3), pages 469-494, December.
- Colucci, Domenico, 2003. "Steady states in the OLG model with seignorage and long-lived agents," Research in Economics, Elsevier, vol. 57(4), pages 371-381, December.
- Miguel N. Foguel & Indermit Gill & Rosane Mendonça & Ricardo Paes de Barros, 2000. "The Public-Private Wage Gap in Brazil," Revista Brasileira de Economia, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil), vol. 54(4), pages 433-472, October.
- Panizza, Ugo & Qiang, Christine Zhen-Wei, 2005. "Public-private wage differential and gender gap in Latin America: Spoiled bureaucrats and exploited women?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 34(6), pages 810-833, December.
- Sergi Jiménez-Martín & Alfonso R. Sánchez, 2003.
"An evaluation of the life-cycle effects of minimum pensions on retirement behavior,"
Economics Working Papers
715, Department of Economics and Business, Universitat Pompeu Fabra, revised Jun 2006.
- Sergi Jiménez-Mart�n & Alfonso R. Sánchez Mart�n, 2007. "An evaluation of the life cycle effects of minimum pensions on retirement behavior," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(5), pages 923-950.
- Sergi Jiménez-Martín & Alfonso R. Sánchez Martín, 2003. "An evaluation of the life-cycle effects of minimum pensions on retirement behavior," Working Papers 108, Barcelona Graduate School of Economics.
- Lynde, Catherine & Richmond, J, 1993. "Public Capital and Total Factor Productivity," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 34(2), pages 401-14, May.
- Douglas Gollin, 2001.
"Getting Income Shares Right,"
Department of Economics Working Papers
2001-11, Department of Economics, Williams College.
- J. Ignacio Conde-Ruiz & Vincenzo Galasso & Paola Profeta, 2005.
"The Evolution of Retirement,"
278, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Gruber, Jonathan & Wise, David, 1998. "Social Security and Retirement: An International Comparison," American Economic Review, American Economic Association, vol. 88(2), pages 158-63, May.
- Jonathan Gruber & David A. Wise, 1999. "Social Security and Retirement around the World," NBER Books, National Bureau of Economic Research, Inc, number grub99-1, May.
- Robert Fenge & Pierre Pestieau, 2005. "Social Security and Early Retirement," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262062496, December.
- Turnovsky, Stephen J., 1999.
"Productive Government Expenditure In A Stochastically Growing Economy,"
Cambridge University Press, vol. 3(04), pages 544-570, December.
- Stephen Turnovsky, 1998. "Productive Government Expenditure in a Stochastically Growing Economy," Working Papers 0056, University of Washington, Department of Economics.
- Stephen Turnovsky, 1998. "Productive Government Expenditure in a Stochastically Growing Economy," Discussion Papers in Economics at the University of Washington 0056, Department of Economics at the University of Washington.
- Sergio G. Ferreira, 2005. "Pension Reform in Brazil: Transitional Issues in a Model with Endogenous Labor Supply," IBMEC RJ Economics Discussion Papers 2005-02, Economics Research Group, IBMEC Business School - Rio de Janeiro.
- Pereira, Luiz Carlos Bresser, 1989. "The Perverse Macroeconomics of Debit, Deficit and Inflation in Brazil," Textos para discussÃ£o 2, Escola de Economia de São Paulo, Getulio Vargas Foundation (Brazil).
- Ignazio Visco, 2000. "Welfare systems, ageing and work: an OECD perspective," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 53(212), pages 3-29.
- Charles R. Hulten, 1996. "Infrastructure Capital and Economic Growth: How Well You Use It May Be More Important Than How Much You Have," NBER Working Papers 5847, National Bureau of Economic Research, Inc.
- Holtz-Eakin, Douglas, 1994. "Public-Sector Capital and the Productivity Puzzle," The Review of Economics and Statistics, MIT Press, vol. 76(1), pages 12-21, February.
- Gregory, Robert G. & Borland, Jeff, 1999. "Recent developments in public sector labor markets," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 53, pages 3573-3630 Elsevier.
- Terrell, Katherine, 1993. "Public-private wage differentials in Haiti Do public servants earn a rent?," Journal of Development Economics, Elsevier, vol. 42(2), pages 293-314, December.
- Fabio Giambiagi & Luiz de Mello, 2006. "Social Security Reform in Brazil: Achievements and Remaining Challenges," OECD Economics Department Working Papers 534, OECD Publishing.
- Sergio Guimarães Ferreira, 2004. "Social Security Reforms under an Open Economy: The Brazilian Case," Revista Brasileira de Economia, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil), vol. 58(3), pages 343-380, July.
- Gerhard Glomm & Juergen Jung, 2013. "A Macroeconomic Analysis of Energy Subsidies in a Small Open Economy," Working Papers 2013-02, Towson University, Department of Economics, revised Feb 2013.
- Gerhard Glomm & Juergen Jung, 2010. "A Macroeconomic Analysis of the Fiscal System in Egypt," Working Papers 2010-17, Towson University, Department of Economics, revised Oct 2010.
- Gerhard Glomm & Juergen Jung & Changmin Lee & Chung Tran, 2009. "Public Sector Pension Policies and Capital Accumulation in Emerging Economies," Discussion Papers 2009-10, School of Economics, The University of New South Wales.
- Julian Diaz Saavedra, 2014. "Early Retirement, Social Security, and Output Gap," ThE Papers 14/01, Department of Economic Theory and Economic History of the University of Granada..
- Juergen Jung & Chung Tran, 2011.
"The Extension of Social Security Coverage in Developing Countries,"
2011-06, Towson University, Department of Economics, revised Nov 2011.
- Jung, Juergen & Tran, Chung, 2012. "The extension of social security coverage in developing countries," Journal of Development Economics, Elsevier, vol. 99(2), pages 439-458.
- Chung Tran & Juergen Jung, 2007. "The Extension of Social Security Coverage in Developing Countries," Caepr Working Papers 2007-026, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington.
- Anna Carolina Saba dos Reis & Eduardo Zilberman, 2013.
"On the Optimal Size of Public Employment,"
Textos para discussÃ£o
612, Department of Economics PUC-Rio (Brazil).
- Agenor, Pierre-Richard & Canuto, Otaviano, 2013. "Gender equality and economic growth in Brazil : a long-run analysis," Policy Research Working Paper Series 6348, The World Bank.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.