Labor supply and retirement policy in an overlapping generations model with stochastic fertility
AbstractUsing a stochastic general equilibrium model with overlapping generations, this paper studies a policy rule for the retirement age aiming at offsetting the effects on the supply of labor following fertility changes. The authors find that the retirement age should increase more than proportionally to the direct fall in labor supply caused by a fall in fertility. The robustness of this result is checked against alternative model specifications and parameter values. The efficacy of the policy rule depends crucially on the link between the preference for leisure and the response of the intensive margin of labor supply to changes in the statutory retirement age. The model has subsequently been calibrated for Brazil by Jorgensen (2010), in the context of the Brazil Aging Study.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 5382.
Date of creation: 01 Jul 2010
Date of revision:
Labor Markets; Labor Policies; Pensions&Retirement Systems; Economic Theory&Research; Population Policies;
This paper has been announced in the following NEP Reports:
- NEP-AGE-2010-08-06 (Economics of Ageing)
- NEP-ALL-2010-08-06 (All new papers)
- NEP-DGE-2010-08-06 (Dynamic General Equilibrium)
- NEP-LAB-2010-08-06 (Labour 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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"How Should The Allocation Of Resources Adjust To The Baby Bust?,"
Working Papers. Serie AD
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- de la Croix, David & Mahieu, Géraldine & Rillaers, Alexandra, 2000. "How should retirement policy adjust to the baby bust ?," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2001003, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Michele Gragnolati & Ole Hagen Jorgensen & Romero Rocha & Anna Fruttero, 2011. "Growing Old in an Older Brazil : Implications of Population Ageing on Growth, Poverty, Public Finance, and Service Delivery," World Bank Publications, The World Bank, number 2351.
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