Pension system and labor market reforms are widely debated issues in all industrialized countries and especially in Europe; any change over these two aspects of the Social Security System indeed, can affect heavily the functioning of the whole economy.A preminent role in this sense is played by employment protection regulation and by the mandatory retirement age; in this paper I focus on the political economy of such social policies jointly and consider the interaction between the choice over the protection of the employees in the labour market and that over retirement age. In particular, I look at the effects of the turnover generated either by temporary, selective exits due to the dynamic of the labour market or by permanent, non-selective exits due to retirements. The degree of employment protection and the mandatory retirement age emerge as a result of the political bargaining between three social groups: young, high and low prductivity old. Workforce composition in this setting defines the efficiency of the economy and determine the rise of a social consensus towards different assets of the Social Security System
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Paper provided by Department of Economics, Parma University (Italy) in its series Economics Department Working Papers with number
2005-EP02.
Find related papers by JEL classification: D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions J63 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Turnover; Vacancies; Layoffs
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J. Ignacio Conde-Ruiz & Vincenzo Galasso, 2003.
"Early Retirement,"
Review of Economic Dynamics,
Elsevier for the Society for Economic Dynamics, vol. 6(1), pages 12-36, January.
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