Labour supply and retirement policy in an overlapping generations model with stochastic fertility
AbstractUsing a stochastic general equilibrium model with overlapping generations, this paper studies a policy rule for the retirement age aiming at offsetting the effects on the supply of labour following fertility changes. We find that the retirement age should increase more than proportionally to the direct fall in the labour supply caused by a fall in fertility. The robustness of this result is checked against alternative model specifications and parameter values. The efficacy of the policy rule depends crucially on the link between the preference for leisure and the response of the intensive margin of labour supply to changes in the statutory retirement age.
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Bibliographic InfoPaper provided by Department of Business and Economics, University of Southern Denmark in its series Discussion Papers of Business and Economics with number 1/2009.
Length: 19 pages
Date of creation: 01 Jan 2009
Date of revision:
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Postal: Department of Business and Economics, University of Southern Denmark, Campusvej 55, DK-5230 Odense M, Denmark
Phone: 65 50 32 33
Fax: 65 50 32 37
Web page: http://www.sdu.dk/ivoe
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Labour supply; fertility; retirement age; overlapping generations; method of undetermined coefficients;
Find related papers by JEL classification:
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
- E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
- J10 - Labor and Demographic Economics - - Demographic Economics - - - General
- J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
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