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Social Security and Retirement across the OECD

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Author Info

  • Jorge Alonso-Ortiz

    ()
    (Centro de Investigacion Economica (CIE), Instituto Tecnologico Autonomo de Mexico (ITAM))

Abstract

Employment to population ratios differ markedly across OECD countries relative to rates in the U.S., especially for persons aged 55-69. Social security features also differ across the OECD, particularly with respect to replacement rates, entitlement ages and earnings tests. I conjecture that differences in social security features explain many differences in employment to population ratios at older ages. I assess my conjecture quantitatively with a life cycle general equilibrium model of retirement. At ages 60-64 the correlation between my model’s simulations and observed data is about two thirds. The replacement rate and the earnings test explain 90% of observed variability, implying that differences in entitlement ages do not explain differences in employment to population rates at older ages.

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Bibliographic Info

Paper provided by Centro de Investigacion Economica, ITAM in its series Working Papers with number 1007.

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Length: 50 pages
Date of creation: 2010
Date of revision:
Handle: RePEc:cie:wpaper:1007

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Keywords: Social Security; Retirement; Idiosyncratic Labor Income Risk;

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References

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  1. Floden, M. & Linde, J., 1998. "Idiosyncratic Risk in the U.S. and Sweden: Is there a Role for Government Insurance?," Papers 654, Stockholm - International Economic Studies.
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Cited by:
  1. Selahattin Imrohoroglu & Sagiri Kitao, 2010. "Social Security, benefit claiming, and labor force participation: a quantitative general equilibrium approach," Staff Reports 436, Federal Reserve Bank of New York.
  2. Heylen Freddy & Van de Kerckhove Renaat, 2013. "Employment by age, education, and economic growth: effects of fiscal policy composition in general equilibrium," The B.E. Journal of Macroeconomics, De Gruyter, vol. 13(1), pages 55, October.
  3. Alonso-Ortiz, Jorge, 2013. "Taxes, Transfers and the Macroeconomy," MPRA Paper 49569, University Library of Munich, Germany.

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