Social Insurance and Retirement: A Cross-Country Perspective
AbstractIn this paper we study the role of social insurance, namely old-age pensions, disability insurance and healthcare, in accounting for the differing labor supply patterns of older individuals across OECD countries. To this end, we develop a life cycle model of labor supply and health with heterogeneous agents. The key features of the framework are: (1) people choose when to stop working, and when/if to apply for disability and pension benefits, (2) the awarding of disability insurance benefits is imperfectly correlated with health, and (3) people can partially insure against health shocks by investing in health, the cost of which is dependent on health insurance coverage. We find that the incentives faced by older workers differ hugely across countries. In fact, based solely on differences in social insurance programs, the model predicts even more cross-country variation in the employment rates of people aged 55-64 than we observe in the data.
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Bibliographic InfoPaper provided by Stockholm School of Economics in its series Working Paper Series in Economics and Finance with number 744.
Length: 36 pages
Date of creation: 25 Apr 2013
Date of revision:
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More information through EDIRC
Life cycle; Retirement; Disability insurance; Health;
Other versions of this item:
- Laun, Tobias & Wallenius, Johanna, 2013. "Social Insurance and Retirement: A Cross-Country Perspective," Working Paper Series, Center for Fiscal Studies 2013:6, Uppsala University, Department of Economics.
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
- J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
This paper has been announced in the following NEP Reports:
- NEP-AGE-2013-05-05 (Economics of Ageing)
- NEP-ALL-2013-05-05 (All new papers)
- NEP-DEM-2013-05-05 (Demographic Economics)
- NEP-DGE-2013-05-05 (Dynamic General Equilibrium)
- NEP-EUR-2013-05-05 (Microeconomic European Issues)
- NEP-IAS-2013-05-05 (Insurance Economics)
- NEP-LAB-2013-05-05 (Labour Economics)
- NEP-LMA-2013-05-05 (Labor Markets - Supply, Demand, & Wages)
- NEP-MAC-2013-05-05 (Macroeconomics)
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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