IDEAS home Printed from https://ideas.repec.org/p/cor/louvco/1999051.html
   My bibliography  Save this paper

Social security and early retirement in an overlapping-generations growth model

Author

Listed:
  • MICHEL, Philippe

    (IUP and GREQAM, Marseille, France)

  • PESTIEAU, Pierre

    (CREPP, Liège, Belgium; CORE, Louvain-la-Neuve, Belgium and DELTA, Paris, France)

Abstract

This paper explains why workers retire earlier, and earlier at the same time as society becomes more and more indebted through increasing pay-as-you-go pension liabilities. To do so, we extend the standard twooverlapping-generations growth model to allow for endogenous labor participation in the later period of life. We show that the rate of participation declines as the size of social security system increases. We also show that mandatory early retirement many be socially desirable in case of underaccumulation.

Suggested Citation

  • MICHEL, Philippe & PESTIEAU, Pierre, 1999. "Social security and early retirement in an overlapping-generations growth model," LIDAM Discussion Papers CORE 1999051, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:1999051
    as

    Download full text from publisher

    File URL: https://sites.uclouvain.be/core/publications/coredp/coredp1999.html
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Hu, Sheng Cheng, 1979. "Social Security, the Supply of Labor, and Capital Accumulation," American Economic Review, American Economic Association, vol. 69(3), pages 274-283, June.
    2. Paul A. Samuelson, 1958. "An Exact Consumption-Loan Model of Interest with or without the Social Contrivance of Money," Journal of Political Economy, University of Chicago Press, vol. 66(6), pages 467-467.
    3. Philippe Weil, 1987. "Love Thy Children," Post-Print hal-03393237, HAL.
    4. Boskin, Michael J, 1977. "Social Security and Retirement Decisions," Economic Inquiry, Western Economic Association International, vol. 15(1), pages 1-25, January.
    5. Feldstein, Martin S, 1974. "Social Security, Induced Retirement, and Aggregate Capital Accumulation," Journal of Political Economy, University of Chicago Press, vol. 82(5), pages 905-926, Sept./Oct.
    6. Weil, Philippe, 1987. "Love thy children : Reflections on the Barro debt neutrality theorem," Journal of Monetary Economics, Elsevier, vol. 19(3), pages 377-391, May.
    7. repec:hal:spmain:info:hdl:2441/8711 is not listed on IDEAS
    8. Laurence J. Kotlikoff & Lawrence H. Summers, 1979. "Tax Incidence in a Life Cycle Model with Variable Labor Supply," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 93(4), pages 705-718.
    9. Burbidge, John B., 1983. "Social security and savings plans in overlapping-generations models," Journal of Public Economics, Elsevier, vol. 21(1), pages 79-92, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Berthold U. Wigger, 2002. "Social Security and Growth in an Altruistic Economy," German Economic Review, Verein für Socialpolitik, vol. 3(1), pages 53-80, February.
    2. Momota, Akira, 2003. "A retirement decision in the presence of a social security system," Journal of Macroeconomics, Elsevier, vol. 25(1), pages 73-86, March.
    3. repec:eee:labchp:v:1:y:1986:i:c:p:305-355 is not listed on IDEAS
    4. Dominik Grafenhofer & Christian Jaag & Christian Keuschnigg & Mirela Keuschnigg, 2005. "Probabilistic Aging," University of St. Gallen Department of Economics working paper series 2005 2005-08, Department of Economics, University of St. Gallen.
    5. T. Buyse & F. Heylen & R. Van De Kerckhove, 2011. "Pension reform, employment by age, and long-run growth in OECD countries," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 11/719, Ghent University, Faculty of Economics and Business Administration.
    6. MICHEL, Philippe & PESTIEAU, Pierre, 2002. "Fiscal policy with agents differing in altruism and in ability," LIDAM Discussion Papers CORE 2002049, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    7. Robinson, James A. & Srinivasan, T.N., 1993. "Long-term consequences of population growth: Technological change, natural resources, and the environment," Handbook of Population and Family Economics, in: M. R. Rosenzweig & Stark, O. (ed.), Handbook of Population and Family Economics, edition 1, volume 1, chapter 21, pages 1175-1298, Elsevier.
    8. J. Ignacio Conde-Ruiz & Vincenzo Galasso & Paola Profeta, "undated". "The Evolution of Retirement," Working Papers 2005-03, FEDEA.
    9. Tim Buyse & Freddy Heylen & Renaat Van de Kerckhove, 2013. "Pension reform, employment by age, and long-run growth," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(2), pages 769-809, April.
    10. Vidal, Jean-Pierre, 2000. "Capital Mobility in a Dynastic Framework," Oxford Economic Papers, Oxford University Press, vol. 52(3), pages 606-625, July.
    11. Barro, Robert J, 1989. "The Ricardian Approach to Budget Deficits," Journal of Economic Perspectives, American Economic Association, vol. 3(2), pages 37-54, Spring.
    12. Chattopadhyay, Subir, 2008. "The Cass criterion, the net dividend criterion, and optimality," Journal of Economic Theory, Elsevier, vol. 139(1), pages 335-352, March.
    13. Lambrecht, Stephane & Michel, Philippe & Vidal, Jean-Pierre, 2005. "Public pensions and growth," European Economic Review, Elsevier, vol. 49(5), pages 1261-1281, July.
    14. Walter Enders & Harvey Lapan, 1993. "A model of first and second-best social security programs," Journal of Economics, Springer, vol. 7(1), pages 65-90, December.
    15. Philippe Weil, 2008. "Overlapping Generations: The First Jubilee," Journal of Economic Perspectives, American Economic Association, vol. 22(4), pages 115-134, Fall.
    16. Emmanuel Thibault, 2017. "Is GDP a Relevant Social Welfare Indicator? A Savers—Spenders Theory Approach," The Japanese Economic Review, Springer, vol. 68(3), pages 333-351, September.
    17. Betti, Thierry & Lefebvre, Mathieu & Pestieau, Pierre, 2023. "Macroeconomics of aging," LIDAM Discussion Papers CORE 2023002, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    18. MICHEL, Philippe, 2003. "Public debt and limited altruism: is Ricardian equivalence possible if altruism is limited ?," LIDAM Discussion Papers CORE 2003008, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    19. Olivia S. Mitchell & Gary S. Fields, 1981. "The Effects of Pensions and Earnings on Retirement: A Review Essay," NBER Working Papers 0772, National Bureau of Economic Research, Inc.
    20. Bertocchi, Graziella & Kehagias, Athanasios, 1995. "Efficiency and optimality in stochastic models with production," Journal of Economic Dynamics and Control, Elsevier, vol. 19(1-2), pages 303-325.
    21. Philippe Michel & Pierre Pestieau, 1998. "Fiscal Policy in a Growth Model with Both Altruistic and Nonaltruistic Agents," Southern Economic Journal, John Wiley & Sons, vol. 64(3), pages 682-697, January.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cor:louvco:1999051. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Alain GILLIS (email available below). General contact details of provider: https://edirc.repec.org/data/coreebe.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.