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Optimal age of retirement and population growth

Author Info

Listed author(s):
  • Bertrand Crettez

    ()

    (L.I.B.R.E., Université de Franche-Comté, Faculté de Droit, Avenue de l'Observatoire, 25030 Besançon, France)

  • Patricia Le Maitre

    ()

    (Université de Bretagne-Sud, ERASME, Ecole Centrale de Paris, Grande voie des vignes, 92295 Châtenay Malabry Cedex, France)

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    Abstract

    The purpose of this paper is to study intergenerational optimal resources sharing when the social planer can choose the retirement age in addition to consumptions and investment. We use the extension of the Diamond analysis by Hu [1979] that incorporates endogenous retirement age. We found that the optimal retirement age is an increasing function of the population growth rate if the elasticity of substitution of old agents' labor for young agents' labor is lower than one. In the millian case, when the size of a population does not matter, and when the elasticity of substitution of old agents' labor for young agents' labor is strictly higher than one, the optimal retirement age is a decreasing function of the population growth rate. In the benthamite case, the change in the optimal retirement age is indeterminate.

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    Article provided by Springer & European Society for Population Economics in its journal Journal of Population Economics.

    Volume (Year): 15 (2002)
    Issue (Month): 4 ()
    Pages: 737-755

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    Handle: RePEc:spr:jopoec:v:15:y:2002:i:4:p:737-755
    Note: Received: 19 February 1999/Accepted: 27 February 2001
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    Keywords: Retirement age; population growth; overlapping generations;

    Find related papers by JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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    Cited by:

    1. Marc Fleurbaey & Marie‐Louise Leroux & Pierre Pestieau & Gregory Ponthiere, 2016. "Fair Retirement Under Risky Lifetime," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 57, pages 177-210, 02.
    2. Jacques Le Cacheux & Vincent Touzé, 2003. "Vieillissement et richesse des nations," Revue de l'OFCE, Presses de Sciences-Po, vol. 84(1), pages 47-91.
    3. Luciano Fanti, 2012. "Consequences of a boost of mandatory retirement age on long run income and PAYG pensions," Discussion Papers 2012/149, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    4. Luciano Fanti, 2015. "Growth, PAYG pension systems crisis and mandatory age of retirement," Economics Bulletin, AccessEcon, vol. 35(2), pages 1160-1167.
    5. Juan Lacomba & Francisco Lagos, 2006. "Population aging and legal retirement age," Journal of Population Economics, Springer;European Society for Population Economics, vol. 19(3), pages 507-519, July.
    6. Luca Gori & Mauro Sodini, 2011. "Nonlinear Dynamics in an OLG Growth Model with Young and Old Age Labour Supply: The Role of Public Health Expenditure," Computational Economics, Springer;Society for Computational Economics, vol. 38(3), pages 261-275, October.
    7. David De La Croix & Géraldine Mahieu & Alexandra Rillaers, 2004. "How Should the Allocation of Resources Adjust to the Baby Bust?," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 6(4), pages 607-636, October.
    8. David De La Croix & Géraldine Mahieu & Alexandra Rillaers, 2004. "How Should the Allocation of Resources Adjust to the Baby Bust?," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 6(4), pages 607-636, October.
    9. repec:spo:wpecon:info:hdl:2441/2087 is not listed on IDEAS
    10. Fernando Perera-Tallo, 2012. "Optimal Retirement Age and Aging Population," 2012 Meeting Papers 728, Society for Economic Dynamics.
    11. Galasso, Vincenzo, 2008. "Postponing retirement: the political effect of aging," Journal of Public Economics, Elsevier, vol. 92(10-11), pages 2157-2169, October.

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