Generous early retirement provisions account for a large proportion of the drop in the labour force participation of elderly workers. The aim of this paper is to provide a political-economic explanation of the wide spread adoption of early retirement. We suggest that the political support for generous early retirement provisions relies on: (i) the existence of an initial, significant group of redundant elderly workers with incomplete working history, who are not entitled to an old age pension; and (ii) the policy persistence that this provision introduces by inducing low-ability workers to retire early. The majority which supports a social security system with early retirement in a bidimensional voting game is composed of elderly workers with incomplete working history and low-ability workers. A descriptive analysis of eleven OECD countries confirms the relevance of the initial group of redundant elderly workers. Early retirement provisions were adopted during the deindustrialization process, almost always, immediately after the first severe decrease in industrial employment.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
|Date of creation:||Oct 2000|
|Date of revision:|
|Contact details of provider:|| Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ.|
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
|Order Information:|| Email: |
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Conde-Ruiz, José Ignacio & Galasso, Vincenzo, 1999.
"Positive Arithmetic of the Welfare State,"
CEPR Discussion Papers
2202, C.E.P.R. Discussion Papers.
- Thomas F. Cooley & Jorge Soares, 1999. "A Positive Theory of Social Security Based on Reputation," Journal of Political Economy, University of Chicago Press, vol. 107(1), pages 135-160, February.
- Feldstein, Martin S, 1974. "Social Security, Induced Retirement, and Aggregate Capital Accumulation," Journal of Political Economy, University of Chicago Press, vol. 82(5), pages 905-26, Sept./Oct.
- Michele Boldrin & Juan J. Dolado & Juan F. Jimeno & Franco Peracchi, .
"The future of pension systems in Europe. A reappraisal,"
- Dolado, Juan José & Peracchi, Franco & Jimeno, Juan F. & Boldrin, Michele, 1999. "The future of pension systems in europe: a reappraisal," UC3M Working papers. Economics 6153, Universidad Carlos III de Madrid. Departamento de Economía.
- Michael J. Boskin & Laurence J. Kotlikoff & Douglas J. Puffert & John B. Shoven, 1986.
"Social Security: A Financial Appraisal Across and Within Generations,"
NBER Working Papers
1891, National Bureau of Economic Research, Inc.
- Boskin, Michael J. & Kotlikoff, Lawrence J. & Puffert, Douglas J. & Shoven, John B., 0. "Social Security: A Financial Appraisal Across and Within Generations," CEPR Publications, Stanford University, Center for Economic Policy Research.
- Michele Boldrin & Aldo Rustichini, 2000. "Political Equilibria with Social Security," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 3(1), pages 41-78, January.
- Sveinbjörn Blöndal & Stefano Scarpetta, 1999. "The Retirement Decision in OECD Countries," OECD Economics Department Working Papers 202, OECD Publishing.
- Michele Boldrin & Juan J. Dolado & Juan F. Jimeno & Franco Peracchi, 1999. "The future of pensions in Europe," Economic Policy, CEPR;CES;MSH, vol. 14(29), pages 287-320, October.
- Hassler, John & Mora, Jose & Storesletten, Kjetil & Zilibotti, Fabrizio, 2002.
"The Survival of the Welfare State,"
704, Stockholm University, Institute for International Economic Studies.
- Hassler, John & Mora, José V Rodríguez & Storesletten, Kjetil & Zilibotti, Fabrizio, 2001. "The Survival of the Welfare State," CEPR Discussion Papers 2905, C.E.P.R. Discussion Papers.
- John Hassler & José V. Rodríguez Mora & Kjetil Storesletten & Fabrizio Zilibotti, 2001. "The survival of the welfare state," Economics Working Papers 603, Department of Economics and Business, Universitat Pompeu Fabra.
- Stephen Coate & Stephen Morris, .
CARESS Working Papres
97-2, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
- Stephen Coate & Stephen Morris, . "Policy Persistence," Penn CARESS Working Papers 8a66677895e9fcb3f6d813c0c, Penn Economics Department.
- Stephen Coate & Stephen Morris, . ""Policy Persistence ''," CARESS Working Papres 95-19, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
- Vincenzo Galasso, 1999. "The US Social Security System: What Does Political Sustainability Imply?," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 2(3), pages 698-730, July.
- Ricardo J. Caballero & Mohamad L. Hammour, 1996.
"The Macroeconomics of Specificity,"
NBER Working Papers
5757, National Bureau of Economic Research, Inc.
- Diamond, P. A. & Mirrlees, J. A., 1978.
"A model of social insurance with variable retirement,"
Journal of Public Economics,
Elsevier, vol. 10(3), pages 295-336, December.
- P. A. Diamond & J. A. Mirrlees, 1977. "A Model of Social Insurance With Variable Retirement," Working papers 210, Massachusetts Institute of Technology (MIT), Department of Economics.
- Boskin, Michael J. & Hurd, Michael D., 1978.
"The effect of social security on early retirement,"
Journal of Public Economics,
Elsevier, vol. 10(3), pages 361-377, December.
- Azariadis, Costas & Galasso, Vincenzo, 2002. "Fiscal Constitutions," Journal of Economic Theory, Elsevier, vol. 103(2), pages 255-281, April.
- Lazear, Edward P, 1979. "Why Is There Mandatory Retirement?," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1261-84, December.
- Vincent P. Crawford & David M. Lilien, 1981. "Social Security and the Retirement Decision," The Quarterly Journal of Economics, Oxford University Press, vol. 96(3), pages 505-529.
- Krusell, Per & Quadrini, Vincenzo & Rios-Rull, Jose-Victor, 1997. "Politico-economic equilibrium and economic growth," Journal of Economic Dynamics and Control, Elsevier, vol. 21(1), pages 243-272, January.
- Guido Tabellini, 1990.
"A Positive Theory of Social Security,"
NBER Working Papers
3272, National Bureau of Economic Research, Inc.
- Galasso, Vincenzo, 2000. "The US Social Security: A Financial Appraisal For The Median Voter," CEPR Discussion Papers 2456, C.E.P.R. Discussion Papers.
- Galasso, Vincenzo & Profeta, Paola, 2002. "The political economy of social security: a survey," European Journal of Political Economy, Elsevier, vol. 18(1), pages 1-29, March.
When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:2589. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.