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Social Security and Retirement across the OECD

  • Jorge Alonso-Ortiz

    ()

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

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.

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Paper provided by Centro de Investigacion Economica, ITAM in its series Working Papers with number 1007.

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Length: 50 pages
Date of creation: 2010
Handle: RePEc:cie:wpaper:1007
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