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Pension reform, employment by age, and long-run growth

  • Tim Buyse

    ()

  • Freddy Heylen
  • Renaat Van de Kerckhove

We study the effects of pension reform on hours worked by three active generations, education of the young, the retirement decision of older workers, and aggregate growth in a four-period OLG model. The model explains important facts well for many OECD countries. Our simulation results prefer an intelligent pay-as-you-go system above a fully funded private system. Positive effects on employment and growth are the strongest when the pay-as-you-go system includes a tight link between individual labor income and the pension, and when it attaches a high weight to labor income earned as an older worker to compute the pension assessment base. Copyright Springer-Verlag 2013

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File URL: http://hdl.handle.net/10.1007/s00148-012-0416-x
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Article provided by Springer in its journal Journal of Population Economics.

Volume (Year): 26 (2013)
Issue (Month): 2 (April)
Pages: 769-809

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Handle: RePEc:spr:jopoec:v:26:y:2013:i:2:p:769-809
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