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Postponing retirement age and labor force participation: the role of family transfers

  • Pascal Belan
  • Pierre-Jean Messe
  • François-Charles Wolff

In this paper, we examine the consequences of delaying retirement in an overlapping generations model with domestic production and parental transfers in the form of grandchild care. We show that a change in age at retirement influences the employment rates of both the young and the old. This interdependency stems from the provision of family transfers. Postponing retirement may increase time devoted to grandchild care transfers, which allows the young to work more on the labor market. We then study the conditions under which this positive family externality holds. Finally, using numerical simulations, we assess the consequences of delaying retirement on labor participation and account for public policy implications. JEL Classification: J26.

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Article provided by De Boeck Université in its journal Recherches économiques de Louvain.

Volume (Year): 76 (2010)
Issue (Month): 4 ()
Pages: 347-370

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Handle: RePEc:cai:reldbu:rel_764_0347
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  1. Dimova, Ralitza & Wolff, François-Charles, 2006. "Do Downward Private Transfers Enhance Maternal Labor Supply? Evidence from around Europe," IZA Discussion Papers 2469, Institute for the Study of Labor (IZA).
  2. Echevarria, Cruz A., 2004. "Life expectancy, retirement and endogenous growth," Economic Modelling, Elsevier, vol. 21(1), pages 147-174, January.
  3. repec:cup:cbooks:9780521001151 is not listed on IDEAS
  4. CASAMATTA, Georges & CREMER, Helmuth & PESTIEAU, Pierre, . "Is there a political support for the double burden on prolonged activity?," CORE Discussion Papers RP -1865, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  5. repec:cup:cbooks:9780521806428 is not listed on IDEAS
  6. Wolff, Francois-Charles, 2006. "Microeconomic models of family transfers," Handbook on the Economics of Giving, Reciprocity and Altruism, Elsevier.
  7. François-Charles Wolff, 2006. "Parental transfers and the labor supply of children," Journal of Population Economics, Springer, vol. 19(4), pages 853-877, October.
  8. Masaru Sasaki, 2002. "The Causal Effect of Family Structure on Labor Force Participation among Japanese Married Women," Journal of Human Resources, University of Wisconsin Press, vol. 37(2), pages 429-440.
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