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Aging, Labor Markets and Pension Reform in Austria

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  • Christian Keuschnigg

    ()

  • Mirela Keuschnigg

    ()

Abstract

This paper investigates the dynamic consequences of demographic change and various pension reform scenarios for Austria. The analysis is based on a computable overlapping generations model with life-cycle labor supply, savings, and search unemployment. The public sector is decomposed into general government and an unfunded pension system with a tax benefit linkage. Our quantitative analysis considers several pension reform scenarios on top of the demographic transition in an aging society. We find that lowering the pension replacement rate and increasing the retirement age can have strong labor market effects. They strengthen labor supply both in terms of job search intensity, leading to lower unemployment rates, and hours worked.

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File URL: http://www1.vwa.unisg.ch/RePEc/usg/dp2004/dp03_keuschnigg_ganz.pdf
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Bibliographic Info

Paper provided by Department of Economics, University of St. Gallen in its series University of St. Gallen Department of Economics working paper series 2004 with number 2004-03.

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Length: 44 pages
Date of creation: Mar 2004
Date of revision:
Handle: RePEc:usg:dp2004:2004-03

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Keywords: Pension reform; demographic change; unemployment;

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References

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Citations

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Cited by:
  1. Miguel Sánchez Romero & Joze Sambt & Alexia Prskawetz, 2012. "Quantifying the role of alternative pension reforms on the Austrian economy," MPIDR Working Papers WP-2012-026, Max Planck Institute for Demographic Research, Rostock, Germany.
  2. Kilponen , Juha & Kinnunen , Helvi & Ripatti , Antti, 2006. "Population ageing in a small open economy – some policy experiments with a tractable general equilibrium model," Research Discussion Papers 28/2006, Bank of Finland.
  3. Christian Jaag, 2005. "The Role of Endogenous Skill Choice in an Aging Economy," Public Economics 0505005, EconWPA.
  4. Dominik Grafenhofer & Christian Jaag & Christian Keuschnigg & Mirela Keuschnigg, 2007. "Economic ageing and demographic change," Vienna Yearbook of Population Research, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna, vol. 5(1), pages 133-165.
  5. Isilda Mara & Edlira Narazani, 2011. "Labour-incentive reforms at preretirement age in Austria," Empirica, Springer, vol. 38(4), pages 481-510, November.
  6. Dominik Grafenhofer & Christian Jaag & Christian Keuschnigg & Mirela Keuschnigg, 2005. "Probabilistic Aging," University of St. Gallen Department of Economics working paper series 2005 2005-08, Department of Economics, University of St. Gallen.
  7. Casamatta, Georges & De Paoli, Caroline, 2007. "Choosing the Legal Retirement Age in Presence of Unemployment," CEPR Discussion Papers 6263, C.E.P.R. Discussion Papers.
  8. Juha Kilponen & Helvi Kinnunen & Antti Ripatti, 2006. "Demographic Uncertainty and Labour Market Imperfections in Small Open Economy," Computing in Economics and Finance 2006 227, Society for Computational Economics.
  9. Christian Keuschnigg & Mirela Keuschnigg & Christian Jaag, 2011. "Aging and the Financing of Social Security in Switzerland," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 147(II), pages 181-231, June.
  10. Narazani, Edlira & Shima, Isilda, 2009. "Labour incentive reforms in pre-retirement age in Austria," EUROMOD Working Papers EM1/09, EUROMOD at the Institute for Social and Economic Research.
  11. Koka, Katerina & Kosempel, Stephen, 2014. "A life-cycle analysis of ending mandatory retirement," Economic Modelling, Elsevier, vol. 38(C), pages 57-66.
  12. Dochka Velkova, 2008. "Changes in the Public Pension System and Their Impact on the Labor Market," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 22-59.

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