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An evaluation of the life cycle effects of minimum pensions on retirement behavior

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  • Sergi Jiménez-Mart�n

    (Department of Economics, Universitat Pompeu Fabra, Barcelona, Spain)

  • Alfonso R. Sánchez Mart�n

    (Department of Economics, Universidad Pablo de Olavide, Seville, Spain)

Abstract

In this paper we explore the effects of the minimum pension program on welfare and retirement in Spain. This is done with a stylized life cycle model which provides a convenient analytical characterization of optimal behavior. We use data from the Spanish Social Security to estimate the behavioral parameters of the model and then simulate the changes induced by the minimum pension in aggregate retirement patterns. The impact is substantial: there is a threefold increase in retirement at 60 (the age of first entitlement) with respect to the economy without minimum pensions, and total early retirement (before or at 60) is almost 50% larger. Copyright © 2007 John Wiley & Sons, Ltd.

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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Journal of Applied Econometrics.

Volume (Year): 22 (2007)
Issue (Month): 5 ()
Pages: 923-950

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Handle: RePEc:jae:japmet:v:22:y:2007:i:5:p:923-950

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  1. Alan L. Gustman & Thomas L. Steinmeier, 2002. "The Social Security Early Entitlement Age in a Structural Model of Retirement and Wealth," Working Papers wp029, University of Michigan, Michigan Retirement Research Center.
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  5. Alfonso R Sánchez-Martín, 2008. "Endogenous Retirement and Public Pension System Reform in Spain," Working Papers 08.06, Universidad Pablo de Olavide, Department of Economics.
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  8. Michele Boldrin & Sergi Jimenez-Martin, 2007. "Evaluating Spanish Pension Expenditure under Alternative Reform Scenarios," NBER Chapters, in: Social Security Programs and Retirement around the World: Fiscal Implications of Reform, pages 351-412 National Bureau of Economic Research, Inc.
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  1. Los parámetros del sistema de pensiones: generosidad, redistribución y políticas de mínimos
    by Sergi Jiménez in Nada Es Gratis on 2010-10-29 22:30:50
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