Advanced Search
MyIDEAS: Login

Quantifying the role of alternative pension reforms on the Austrian economy

Contents:

Author Info

  • Sánchez-Romero, Miguel
  • Sambt, Jože
  • Prskawetz, Alexia

Abstract

This paper investigates the role of recent pension reforms for the development of the social security system and economic growth in Austria. We use a computable general equilibrium model that is built up of overlapping generations that differ by their household structure, longevity, educational attainment, and capital accumulation. Each household optimally decides over its consumption paths, work effort, and retirement age according to the life-cycle theory of labor, while they face survival risk. We find that the pension reforms implemented from 2000 to 2004, although in the correct direction, are not sufficient to solve the labor market distortion caused by the Austrian pay-as-you-go (PAYG) pension system. Using alternative policy options, our simulations indicate that a change to a notional defined contribution system and an increase in the educational distribution of the work force would increase the incentive for later retirement ages and thereby increase labor supply and economic growth.

Download Info

If 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.
File URL: http://www.sciencedirect.com/science/article/pii/S0927537112001327
Download Restriction: Full text for ScienceDirect subscribers only

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 Info

Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 22 (2013)
Issue (Month): C ()
Pages: 94-114

as in new window
Handle: RePEc:eee:labeco:v:22:y:2013:i:c:p:94-114

Contact details of provider:
Web page: http://www.elsevier.com/locate/labeco

Related research

Keywords: Aging; Social security; Retirement; Overlapping generations;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
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.:
as in new window
  1. dʼAlbis, Hippolyte & Lau, Sau-Him Paul & Sánchez-Romero, Miguel, 2012. "Mortality transition and differential incentives for early retirement," Journal of Economic Theory, Elsevier, vol. 147(1), pages 261-283.
  2. Helmut Hofer & Reinhard Koman, 2006. "Social security and retirement incentives in Austria," Empirica, Springer, vol. 33(5), pages 285-313, December.
  3. Alan J. Auerbach & Ronald Lee, 2006. "Notional Defined Contribution Pension Systems in a Stochastic Context: Design and Stability," NBER Working Papers 12805, National Bureau of Economic Research, Inc.
  4. Isilda Mara & Edlira Narazani, 2011. "Labour-incentive reforms at preretirement age in Austria," Empirica, Springer, vol. 38(4), pages 481-510, November.
  5. Juan A. Rojas, . "Life-cycle Earnings Cohort Size Effects and Social Security. A Quantitative Exploration," Studies on the Spanish Economy 88, FEDEA.
  6. Christian Jaag & Christian Keuschnigg & Mirela Keuschnigg, 2007. "Pension Reform, Retirement and Life-Cycle Unemployment," University of St. Gallen Department of Economics working paper series 2007 2007-43, Department of Economics, University of St. Gallen.
  7. Heckman, James J & Macurdy, Thomas E, 1980. "A Life Cycle Model of Female Labour Supply," Review of Economic Studies, Wiley Blackwell, vol. 47(1), pages 47-74, January.
  8. Imrohoroglu, Selahattin & Kitao, Sagiri, 2009. "Labor supply elasticity and social security reform," Journal of Public Economics, Elsevier, vol. 93(7-8), pages 867-878, August.
  9. Lam, David, 1989. "Population Growth, Age Structure, and Age-Specific Productivity: Does a Uniform Age Distribution Minimize Lifetime Wages?," Journal of Population Economics, Springer, vol. 2(3), pages 189-210.
  10. R. Anton Braun & Daisuke Ikeda & Douglas H. Joines, 2009. "The Saving Rate In Japan: Why It Has Fallen And Why It Will Remain Low," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 50(1), pages 291-321, 02.
  11. Axel Boersch-Supan & Alexander Ludwig & Joachim Winter, 2005. "Aging, Pension Reform, and Capital Flows: A Multi-Country Simulation Model," NBER Working Papers 11850, National Bureau of Economic Research, Inc.
  12. Axel Boersch-Supan & Florian Heiss & Alexander Ludwig & Joachim Winter, 2003. "Pension Reform, Capital Markets and the Rate of Return," German Economic Review, Verein für Socialpolitik, vol. 4(2), pages 151-181, 05.
  13. Markus Knell & Walpurga Köhler-Töglhofer & Doris Prammer, 2006. "The Austrian Pension System – How Recent Reforms Have Changed Fiscal Sustainability and Pension Benefits," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 2, pages 69–93.
  14. Michael Reiter & Alexander Ludwig, 2009. "Sharing Demographic Risk – Who is Afraid of the Baby Bust?," 2009 Meeting Papers 389, Society for Economic Dynamics.
  15. Steven Lugauer & Nelson C. Mark & Chadwick R. Curtis, 2011. "Demographic Patterns and Household Saving in China," 2011 Meeting Papers 529, Society for Economic Dynamics.
  16. Jonathan Gruber & David A. Wise, 2007. "Social Security Programs and Retirement around the World: Fiscal Implications of Reform," NBER Books, National Bureau of Economic Research, Inc, number grub07-1, octubre-d.
  17. Keuschnigg Christian & Keuschnigg Mirela, 2004. "Aging, Labor Markets and Pension Reform in Austria," GE, Growth, Math methods 0404002, EconWPA.
  18. Boucekkine, Raouf & de la Croix, David & Licandro, Omar, 2000. "Vintage Human Capital, Demographic Trends and Endogenous Growth," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2000007, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  19. Daron Acemoglu & David Autor, 2012. "What Does Human Capital Do? A Review of Goldin and Katz's The Race between Education and Technology," NBER Working Papers 17820, National Bureau of Economic Research, Inc.
  20. Martin Browning & Mette Ejrnæs, 2009. "Consumption and Children," The Review of Economics and Statistics, MIT Press, vol. 91(1), pages 93-111, February.
  21. Jonathan Gruber & David A. Wise, 2002. "Social Security Programs and Retirement Around the World: Micro Estimation," NBER Working Papers 9407, National Bureau of Economic Research, Inc.
  22. Fisher, Walter H. & Keuschnigg, Christian, 2007. "Pension Reform and Labor Market Incentives," Economics Series 208, Institute for Advanced Studies.
  23. Ben J. Heijdra & Ward E. Romp, 2007. "Retirement, Pensions, and Ageing," CESifo Working Paper Series 1974, CESifo Group Munich.
  24. Daron Acemoglu & David Autor, 2012. "What Does Human Capital Do? A Review of Goldin and Katz's The Race between Education and Technology," Journal of Economic Literature, American Economic Association, vol. 50(2), pages 426-63, June.
  25. Orazio P. Attanasio & Guglielmo Weber, 2010. "Consumption and Saving: Models of Intertemporal Allocation and Their Implications for Public Policy," NBER Working Papers 15756, National Bureau of Economic Research, Inc.
  26. Martin Browning & Annamaria Lusardi, 1996. "Household Saving: Micro Theories and Micro Facts," Discussion Papers 96-01, University of Copenhagen. Department of Economics.
  27. Selahattin Imrohoroglu & Sagiri Kitao, 2012. "Social Security Reforms: Benefit Claiming, Labor Force Participation, and Long-Run Sustainability," American Economic Journal: Macroeconomics, American Economic Association, vol. 4(3), pages 96-127, July.
  28. Michael Keane, 2010. "Labor Supply and Taxes: A Survey," Working Paper Series 160, Finance Discipline Group, UTS Business School, University of Technology, Sydney.
  29. Samir KC & Bilal Barakat & Anne Goujon & Vegard Skirbekk & Warren C. Sanderson & Wolfgang Lutz, 2010. "Projection of populations by level of educational attainment, age, and sex for 120 countries for 2005-2050," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 22(15), pages 383-472, March.
  30. Stefan Staubli & Josef Zweimüller, 2012. "Does Raising the Retirement Age increase Employment of Older Workers?," NRN working papers 2012-06, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
  31. Mark Gertler, 1997. "Government Debt and Social Security in a Life-Cycle Economy," NBER Working Papers 6000, National Bureau of Economic Research, Inc.
  32. Jonathan Gruber & David A. Wise, 2007. "Introduction to "Social Security Programs and Retirement around the World: Fiscal Implications of Reform"," NBER Chapters, in: Social Security Programs and Retirement around the World: Fiscal Implications of Reform, pages 1-42 National Bureau of Economic Research, Inc.
  33. Adriaan Kalwij, 2010. "The impact of family policy expenditure on fertility in western Europe," Demography, Springer, vol. 47(2), pages 503-519, May.
  34. Michael Keane & Richard Rogerson, 2012. "Micro and Macro Labor Supply Elasticities: A Reassessment of Conventional Wisdom," Journal of Economic Literature, American Economic Association, vol. 50(2), pages 464-76, June.
  35. Hippolyte D'Albis & Emmanuelle Augeraud-Véron, 2008. "Endogenous Retirement and Monetary Cycles," Post-Print hal-00424801, HAL.
  36. Heckman, James J & MaCurdy, Thomas, 1982. "Corrigendum on a Life Cycle Model of Female Labour Supply," Review of Economic Studies, Wiley Blackwell, vol. 49(4), pages 659-60, October.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Bloom, David E. & Sousa-Poza, Alfonso, 2013. "Ageing and productivity," FZID Discussion Papers 63-2012, University of Hohenheim, Center for Research on Innovation and Services (FZID).
  2. Miguel Sánchez Romero & Naohiro Ogawa & Rikiya Matsukura, 2013. "To give or not to give: bequest estimate and wealth impact based on a CGE model with realistic demography in Japan," MPIDR Working Papers WP-2013-012, Max Planck Institute for Demographic Research, Rostock, Germany.
  3. Bloom, David E. & Sousa-Poza, Alfonso, 2013. "Ageing and Productivity: Introduction," IZA Discussion Papers 7205, Institute for the Study of Labor (IZA).

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eee:labeco:v:22:y:2013:i:c:p:94-114. See general information about how to correct material in RePEc.

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.