Labor Market Search and Optimal Retirement Policy
AbstractA popular and long-standing view is that social security is a means for young, unemployed people to "purchase" jobs from older workers. Can social security, by encouraging retirement and hence creating job vacancies for the young, improve the allocation of workers to jobs? Maybe, according to a standard model of labor market search, but public retirement programs currently pay the elderly substantially more than their jobs are worth. An important effect is that retirement reduces the value of other vacant jobs. Our results imply that recent reforms aimed at reducing retirement incentives are likely to improve labor market efficiency. (JEL J41, H55, J64, J26) Copyright 2004, Oxford University Press.
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Bibliographic InfoArticle provided by Western Economic Association International in its journal Economic Inquiry.
Volume (Year): 42 (2004)
Issue (Month): 4 (October)
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Other versions of this item:
- Bhattacharya, Joydeep & Mulligan, Casey & Reed, Robert, 2003. "Labor Market Search and Optimal Retirement Policy," Staff General Research Papers 10251, Iowa State University, Department of Economics.
- Joydeep Bhattacharya & Casey B. Mulligan & Robert R. Reed III, 2001. "Labor Market Search and Optimal Retirement Policy," NBER Working Papers 8591, National Bureau of Economic Research, Inc.
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search
- J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
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.:
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- Bhattacharya, Joydeep & Reed, Robert, 2003. "A Positive Theory of the Income Redistributive Focus of Social Security," Staff General Research Papers 10681, Iowa State University, Department of Economics.
- Bhattacharya, Joydeep & Reed, Robert, 2003. "Age-Specific Employment Policies," Staff General Research Papers 10256, Iowa State University, Department of Economics.
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