Raising the Retirement Age--Why Should Anybody Lose?
This paper questions the view that a rise of the retirement age does not reduce the financial problems of a pay-as-you-go public pension system if individuals receive compensations for additional years spent in the labor force. It is shown that rather utility compensation is required than actuarial compensation. As the former is lower it creates an opportunity to raise the retirement age in a Pareto-improving way. By performing a dynamic CGE analysis for Germany, a compensation scheme is derived which is not only Pareto-improving but leads to a large reduction of the contribution rates.
Volume (Year): 219 (1999)
Issue (Month): 3+4 (September)
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