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Social security and cross-country differences in hours: A general equilibrium analysis

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  • Wallenius, Johanna

Abstract

I develop a general equilibrium life cycle model with an intensive and extensive margin of labor supply and endogenous human capital accumulation. I use the model to assess the effects of changes to various features of social security on labor supply outcomes. Of particular interest are changes to the scale of the program and to the relevant eligibility rules. I find that the cross-country differences in social security programs account for at least 79% of the differences in employment rates of people aged 55–64 and 17–31% of the differences in aggregate hours worked between the US and continental Europe.

Suggested Citation

  • Wallenius, Johanna, 2013. "Social security and cross-country differences in hours: A general equilibrium analysis," Journal of Economic Dynamics and Control, Elsevier, vol. 37(12), pages 2466-2482.
    • Handle: RePEc:eee:dyncon:v:37:y:2013:i:12:p:2466-2482
    DOI: 10.1016/j.jedc.2013.06.002
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    More about this item

    Keywords

    Life cycle; Retirement; Social security;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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