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Social Security and Retirement across the OECD

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  • Jorge Alonso-Ortiz

    () (Centro de Investigacion Economica (CIE), Instituto Tecnologico Autonomo de Mexico (ITAM))

Abstract

Employment to population ratios differ markedly across OECD countries relative to rates in the U.S., especially for persons aged 55-69. Social security features also differ across the OECD, particularly with respect to replacement rates, entitlement ages and earnings tests. I conjecture that differences in social security features explain many differences in employment to population ratios at older ages. I assess my conjecture quantitatively with a life cycle general equilibrium model of retirement. At ages 60-64 the correlation between my model’s simulations and observed data is about two thirds. The replacement rate and the earnings test explain 90% of observed variability, implying that differences in entitlement ages do not explain differences in employment to population rates at older ages.

Suggested Citation

  • Jorge Alonso-Ortiz, 2010. "Social Security and Retirement across the OECD," Working Papers 1007, Centro de Investigacion Economica, ITAM.
  • Handle: RePEc:cie:wpaper:1007
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    Cited by:

    1. Bick, Alexander & Fuchs-Schündeln, Nicola, 2017. "Taxation and Labor Supply of Married Couples across Countries: A Macroeconomic Analysis," IZA Discussion Papers 10504, Institute for the Study of Labor (IZA).
    2. Selahattin Imrohoroglu & Sagiri Kitao, 2010. "Social Security, Benefit Claiming and Labor Force Participation: A Quantitative General Equilibrium Approach," Working Papers, Center for Retirement Research at Boston College wp2010-02, Center for Retirement Research, revised Mar 2010.
    3. repec:red:issued:17-49 is not listed on IDEAS
    4. Freddy Heylen & Renaat Van de Kerckhove, 2014. "Heterogeneous ability and the effects of fiscal policy on employment, income and welfare in general equilibrium," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 14/898, Ghent University, Faculty of Economics and Business Administration.
    5. Jorge Alonso & Catalina Amuedo-Dorantes & Laura Juárez, 2016. "The Effect of Non-contributory Pensions on Saving in Mexico," IDB Publications (Working Papers) 7861, Inter-American Development Bank.
    6. repec:anr:reveco:v:9:y:2017:p:383-409 is not listed on IDEAS
    7. Jorge Alonso & Catalina Amuedo-Dorantes & Laura Juárez, 2016. "The Effect of Non-contributory Pensions on Saving in Mexico," IDB Publications (Working Papers) 95976, Inter-American Development Bank.
    8. Eric French & John Bailey Jones, 2017. "Health, Health Insurance, and Retirement: A Survey," Annual Review of Economics, Annual Reviews, vol. 9(1), pages 383-409, September.
    9. Frank N. Caliendo & Maria Casanova & Aspen Gorry & Sita Slavov, 2016. "The Welfare Cost of Retirement Uncertainty," NBER Working Papers 22609, National Bureau of Economic Research, Inc.
    10. Alexander Bick & Bettina Brüggemann & Nicola Fuchs-Schündeln, 2016. "Hours Worked in Europe and the US: New Data, New Answers," CESifo Working Paper Series 6068, CESifo Group Munich.
    11. Brecht Boone & Freddy Heylen, 2015. "Cross-country differences in unemployment: fiscal policy,unions and household preferences in general equilibrium," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 15/899, Ghent University, Faculty of Economics and Business Administration.
    12. Bick, Alexander & Fuchs-Schündeln, Nicola & Lagakos, David, 2016. "How do Average Hours Worked Vary with Development? Cross-Country Evidence and Implications," CEPR Discussion Papers 11092, C.E.P.R. Discussion Papers.
    13. Sita Slavov & Devon Gorry & Aspen Gorry & Frank N. Caliendo, 2017. "Social Security and Saving: An Update," NBER Working Papers 23506, National Bureau of Economic Research, Inc.
    14. Nicola Fuchs-Schündeln & David Lagakos & Alexander Bick, 2017. "How do Hours Worked Vary with Income? Cross-Country Evidence and Implications," 2017 Meeting Papers 568, Society for Economic Dynamics.
    15. Heylen Freddy & Van de Kerckhove Renaat, 2013. "Employment by age, education, and economic growth: effects of fiscal policy composition in general equilibrium," The B.E. Journal of Macroeconomics, De Gruyter, vol. 13(1), pages 1-55, October.
    16. Christian vom Lehn & Eric Fisher & Aspen Gorry, 2018. "Male Labor Supply and Generational Fiscal Policy," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 28, pages 121-149, April.
    17. Daniel Vuuren, 2014. "Flexible Retirement," Journal of Economic Surveys, Wiley Blackwell, vol. 28(3), pages 573-593, July.
    18. Alonso-Ortiz, Jorge, 2013. "Taxes, Transfers and the Macroeconomy," MPRA Paper 49569, University Library of Munich, Germany.
    19. Fuchs-Schündeln, Nicola & Bick, Alexander & Brüggemann, Bettina, 2017. "Hours Worked in Europe and the US: New Data, New Answers," Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168232, Verein für Socialpolitik / German Economic Association.
    20. Alexander Bick & Nicola Fuchs-Schündeln & David Lagakos, 2016. "How do Hours Worked Vary with Income? Cross-Country Evidence and Implications," NBER Working Papers 21874, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    Social Security; Retirement; Idiosyncratic Labor Income Risk;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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