Defined contribution plan vs. defined benefits plan: reforming the legal retirement age
AbstractIn the context of the current debate surrounding the reform of most social security systems, this paper analyzes the political economy of the legal retirement age. Using a life-cycle model, we study the effects of changing the redistributive parameters on the optimal legal retirement age in a Pay-As-You-Go social security system. Two pension plans are studied, with opposite results. In a defined contribution plan, an increase in the redistribution levels will delay the preferred legal retirement age. On the other hand, in a defined benefits plan, the same increase in the redistribution levels will lower this preferred age.
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Bibliographic InfoArticle provided by Taylor and Francis Journals in its journal Journal of Economic Policy Reform.
Volume (Year): 12 (2009)
Issue (Month): 1 ()
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Other versions of this item:
- Juan Lacomba & Francisco Lagos, 2009. "Defined contribution plan vs. defined benefits plan: reforming the legal retirement age," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 12(1), pages 1-11.
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