The Evolution of Retirement
Abstract
We provide a long term perspective on the individual retirement behavior and on the future of early retirement. In a cross-country sample, we find that total pension spending depends positively on the degree of early retirement and on the share of elderly in the population, which increase the proportion of retirees, but has hardly any effect on the per-capita pension benefits. We show that in a Markovian political economic theoretical framework, in which incentives to retire early are embedded, a political equilibrium is characterized by an increasing sequence of social security contribution rates converging to a steady state and early retirement. Comparative statics suggest that aging and productivity slow-downs lead to higher taxes and more early retirement. However, when income effects are factored in, the model suggests that periods of stagnation — characterized by decreasing labor income — may lead middle aged individuals to postpone retirement.Download Info
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Paper provided by IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University in its series Working Papers with number 278.Length:
Date of creation: 2005
Date of revision:
Handle: RePEc:igi:igierp:278
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Related research
Keywords:Other versions of this item:
- Conde-Ruiz, José Ignacio & Galasso, Vincenzo & Profeta, Paola, 2005. "The Evolution of Retirement," CEPR Discussion Papers 4863, C.E.P.R. Discussion Papers.
- J. Ignacio Conde-Ruiz & Vincenzo Galasso & Paola Profeta, . "The Evolution of Retirement," Working Papers 2005-03, FEDEA.
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-01-23 (All new papers)
- NEP-LAB-2005-01-23 (Labour Economics)
- NEP-POL-2005-01-23 (Positive Political Economics)
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
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Caepr Working Papers
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