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Population Aging and Legal Retirement Age

Author

Listed:
  • Juan Antonio Lacomba

    () (Department of Economic Theory and Economic History, University of Granada)

  • Francisco Miguel Lagos

    (Department of Economic Theory and Economic History, University of Granada)

Abstract

This paper analyzes the effects of population aging on the preferred legal retirement age. What is revealed is the crucial role that the indirect ’macro’ effects resulting from a change in the legal retirement age play in the optimal decision. Two Social Security systems are studied. Under a defined contribution scheme aging lowers the preferred legal retirement age. However, under a defined pension scheme the retirement age is delayed. This result shows the relevance of correctly choosing the parameter affected by the dependency ratio in the design of the Social Security programme.

Suggested Citation

  • Juan Antonio Lacomba & Francisco Miguel Lagos, 2005. "Population Aging and Legal Retirement Age," ThE Papers 05/16, Department of Economic Theory and Economic History of the University of Granada..
  • Handle: RePEc:gra:wpaper:05/16
    as

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    File URL: http://www.ugr.es/~teoriahe/RePEc/gra/wpaper/thepapers05_16.pdf
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    References listed on IDEAS

    as
    1. Cremer, Helmuth & Pestieau, Pierre, 2000. "Reforming our pension system: Is it a demographic, financial or political problem?," European Economic Review, Elsevier, vol. 44(4-6), pages 974-983, May.
    2. Cremer, Helmuth & Pestieau, Pierre, 2003. "The Double Dividend of Postponing Retirement," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 10(4), pages 419-434, August.
    3. Samwick, Andrew A., 1998. "New evidence on pensions, social security, and the timing of retirement," Journal of Public Economics, Elsevier, vol. 70(2), pages 207-236, November.
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    5. J. Ignacio Conde-Ruiz & Vincenzo Galasso & Paola Profeta, "undated". "The Evolution of Retirement," Working Papers 2005-03, FEDEA.
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    8. Sheshinski, Eytan, 1978. "A model of social security and retirement decisions," Journal of Public Economics, Elsevier, vol. 10(3), pages 337-360, December.
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    10. Bertrand Crettez & Patricia Le Maitre, 2002. "Optimal age of retirement and population growth," Journal of Population Economics, Springer;European Society for Population Economics, vol. 15(4), pages 737-755.
    11. 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.
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    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Social security; aging; legal retirement age;

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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