IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Ausbildung, Erwerbsphase, Renteneintrittdemografischer Wandel und optimale Zeitallokation im Lebenszyklus / Education, Working Period, Retirement - Demographic Change and Optimal Time Allocation Within the Life-cycle

  • Debus Martin


  • Michaelis Jochen


    (Universität Kassel, Institut für Volkswirtschaftslehre, Nora-Platiel- Str. 4, D-34127 Kassel, Germany)

We study how the education and retirement decision of a representative individual is affected by the demographic trend. Individuals optimally choose the date at which they leave school to work and at which they retire. Applying an OLG-model with a pay-as-you-go social security system we show how individuals optimally respond to a) a change in the current wage for a unit of human capital, b) a change in the perfectly foreseen future wage for a unit of human capital, c) a decrease in the anticipated future pension benefit, and d) an increase in the future social contribution rate. From the government’s point of view it would be desirable to control for an instrument which increases both the accumulation of human capital before starting to work and the retirement age. Our findings suggest that policy-makers should respond to the demographic trend by reducing pension benefits. Compared to the most relevant alternative, i.e. an increase in the contribution rate, individuals would choose a longer working life, working becomes more attractive. This in turn creates an incentive to invest more in education and to accumulate more human capital.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by De Gruyter in its journal Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik).

Volume (Year): 226 (2006)
Issue (Month): 6 (December)
Pages: 611-628

in new window

Handle: RePEc:jns:jbstat:v:226:y:2006:i:6:p:611-628
Contact details of provider: Web page:

Order Information: Web:

References listed on IDEAS
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.:

as in new window
  1. Richard Blundell & Martin Browning & Costas Meghir, 1994. "Consumer Demand and the Life-Cycle Allocation of Household Expenditures," Review of Economic Studies, Oxford University Press, vol. 61(1), pages 57-80.
  2. Galor, Oded & Tsiddon, Daniel, 1997. "The Distribution of Human Capital and Economic Growth," Journal of Economic Growth, Springer, vol. 2(1), pages 93-124, March.
  3. Alan B. Krueger & Mikael Lindahl, 2000. "Education for Growth: Why and For Whom?," NBER Working Papers 7591, National Bureau of Economic Research, Inc.
  4. Conde-Ruiz, J. Ignacio & Galasso, Vincenzo, 2004. "The macroeconomics of early retirement," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 1849-1869, August.
  5. Boskin, Michael J. & Hurd, Michael D., 1978. "The effect of social security on early retirement," Journal of Public Economics, Elsevier, vol. 10(3), pages 361-377, December.
  6. Yoram Ben-Porath, 1967. "The Production of Human Capital and the Life Cycle of Earnings," Journal of Political Economy, University of Chicago Press, vol. 75, pages 352.
  7. Kemnitz, Alexander & Wigger, Berthold U., 2000. "Growth and social security: the role of human capital," European Journal of Political Economy, Elsevier, vol. 16(4), pages 673-683, November.
  8. Ahituv, Avner & Zeira, Joseph, 2002. "Technical Progress and Early Retirement," Working Paper Series rwp02-007, Harvard University, John F. Kennedy School of Government.
  9. Raouf Boucekkine & David de la Croix & Omar Licandro, . "vintage human capital, demographic trends and endogenous growth," Working Papers 2000-02, FEDEA.
  10. Simone Kohnz & Reinhold Schnabel, 2002. "Micro Modeling of Retirement Decisions in Germany," MEA discussion paper series 02020, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
  11. Axel Börsch-Supan, 2003. "Labor Market Effects of Population Aging," LABOUR, CEIS, vol. 17(SpecialIs), pages 5-44, 08.
  12. Costas Azariadis & Allan Drazen, 1990. "Threshold Externalities in Economic Development," The Quarterly Journal of Economics, Oxford University Press, vol. 105(2), pages 501-526.
  13. Berthold U. Wigger, 1999. "Public Pensions and Growth," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 56(2), pages 241-, June.
  14. David Evans & Haluk Sezer, 2004. "Social discount rates for six major countries," Applied Economics Letters, Taylor & Francis Journals, vol. 11(9), pages 557-560.
  15. David J. Evans, 2005. "The elasticity of marginal utility of consumption: estimates for 20 OECD countries," Fiscal Studies, Institute for Fiscal Studies, vol. 26(2), pages 197-224, June.
  16. Jochen Michaelis & Michael Pflüger, 2000. "The impact of tax reforms on unemployment in a SMOPEC," Journal of Economics, Springer, vol. 72(2), pages 175-201, June.
  17. Vincent P. Crawford & David M. Lilien, 1981. "Social Security and the Retirement Decision," The Quarterly Journal of Economics, Oxford University Press, vol. 96(3), pages 505-529.
  18. Eytan Sheshinski, 1977. "A Model of Social Security and Retirement Decisions," NBER Working Papers 0187, National Bureau of Economic Research, Inc.
  19. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:jns:jbstat:v:226:y:2006:i:6:p:611-628. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Golla)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.