A Quantitative Investigation of the Laffer Curve on the Continued Work Tax: The French Case
AbstractIt is often argued that the tax on continued work should be removed by implementing actuarially fair schemes. However, these schemes cannot help fund the expected Social Security deficit. This paper proposes to give individuals only a fraction of the marginal actuarially fair incentives in case of postponed retirement. Social Security then faces a trade-off between giving enough incentives to make individuals actually delay retirement and giving little increase in pensions in order to help finance its expected deficit. This trade-off is captured by a Laffer curve that we quantify on French data. Furthermore, we analyze the interactions between wealth and retirement behavior.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1499.
Length: 37 pages
Date of creation: Feb 2005
Date of revision:
Publication status: published in: International Economic Review, 2008, 49(3), 755-797
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Other versions of this item:
- Sopraseuth, Thepthida & Hairault, Jean-Olivier & Langot, François, 2004. "A quantitative investigation of the Laffer curve on the continued work tax : the French case," CEPREMAP Working Papers (Couverture Orange) 0409, CEPREMAP.
- H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
- J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-02-27 (All new papers)
- NEP-DGE-2005-02-27 (Dynamic General Equilibrium)
- NEP-PBE-2005-02-27 (Public Economics)
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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