Growth, PAYG pension systems crisis and mandatory age of retirement
AbstractSince in many countries - plagued by low fertility - significant increases of the mandatory retirement age have been recently introduced with the declared objective to sustain PAYG pension budgets, then in this paper we investigate whether and how such boosts are effective. It is shown - in the basic two-period overlapping generations model of endogenous growth, which is maybe the toy-model most used for pension policy analyses - that the postponement of the retirement age is always harmful for growth and even for pension payments. Therefore this result suggests that the effects of boosts of mandatory retirement ages for sustaining PAYG pension budgets may not be warranted.
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Bibliographic InfoPaper provided by Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy in its series Discussion Papers with number 2012/153.
Date of creation: 01 Sep 2012
Date of revision:
Retirement age; Pensions; OLG model;
Find related papers by JEL classification:
- J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
This paper has been announced in the following NEP Reports:
- NEP-AGE-2012-11-03 (Economics of Ageing)
- NEP-ALL-2012-11-03 (All new papers)
- NEP-DEM-2012-11-03 (Demographic Economics)
- NEP-DGE-2012-11-03 (Dynamic General Equilibrium)
- NEP-FDG-2012-11-03 (Financial Development & Growth)
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