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Early Retirement, Social Security, and Output Gap

  • Julian Diaz Saavedra

    ()

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

We analyze two social security reforms aimed at increasing working lifetimes. The rst reform elim- inates early retirement provisions, while the second increases both the age of early eligibility and the normal retirement age. We nd that although both reforms increase the participation rates of older workers, the elimination of early retirement provisions reduces future social security imbalances if ben- e ts taken early are not reduced actuarially. Additionally, we nd that both reforms increase aggregate hours and output, although eciency gains derived from the elimination of the early retirement scheme are distant from previous estimates since labor supply could be less responsive. Finally, we also nd that the output gap brought about by the early retirement scheme may decrease in coming decades.

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File URL: http://www.ugr.es/~teoriahe/RePEc/gra/wpaper/thepapers14_01.pdf
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Paper provided by Department of Economic Theory and Economic History of the University of Granada. in its series ThE Papers with number 14/01.

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Length: 33 pages
Date of creation: 09 Jan 2014
Date of revision:
Handle: RePEc:gra:wpaper:14/01
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  1. Gary Burtless & Joseph F. Quinn, 2002. "Is Working Longer the Answer for an Aging Workforce?," Issues in Brief ib2002-11, Center for Retirement Research, revised Dec 2002.
  2. J. Ignacio Conde-Ruiz & Paola Profeta, 2007. "The Redistributive Design of Social Security Systems," Economic Journal, Royal Economic Society, vol. 117(520), pages 686-712, 04.
  3. Conde-Ruiz, José Ignacio & Galasso, Vincenzo, 2000. "Early Retirement," CEPR Discussion Papers 2589, C.E.P.R. Discussion Papers.
  4. Imrohoroglu, Ayse & Imrohoroglu, Selahattin & Joines, Douglas H, 1995. "A Life Cycle Analysis of Social Security," Economic Theory, Springer, vol. 6(1), pages 83-114, June.
  5. Glomm, Gerhard & Jung, Juergen & Tran, Chung, 2009. "Macroeconomic implications of early retirement in the public sector: The case of Brazil," Journal of Economic Dynamics and Control, Elsevier, vol. 33(4), pages 777-797, April.
  6. Raquel Vegas & Isabel Argimón & Marta Botella & Clara I. González, 2009. "Retirement behaviour and retirement incentives in Spain," Banco de Espa�a Working Papers 0913, Banco de Espa�a.
  7. 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.
  8. Conde-Ruiz, José Ignacio & Galasso, Vincenzo, 2003. "The Macroeconomics of Early Retirement," CEPR Discussion Papers 3896, C.E.P.R. Discussion Papers.
  9. Hutchens, Robert, 1999. "Social Security Benefits and Employer Behavior: Evaluating Social Security Early Retirement Benefits as a Form of Unemployment Insurance," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(3), pages 659-78, August.
  10. Michele Boldrin & José Ignacio Conde-Ruiz & Javier Díaz Giménez, 2010. "Eppur si Muove! Spain: Growing without a Model," Working Papers 2010-12, FEDEA.
  11. Alfonso R. Sánchez Martín, 2001. "Endogenous Retirement And Public Pension System Reform In Spain," Economics Working Papers we013503, Universidad Carlos III, Departamento de Economía.
  12. Michele Boldrin & Sergi Jimenez-Martni & Franco Peracchi, 1997. "Social Security and Retirement in Spain," NBER Working Papers 6136, National Bureau of Economic Research, Inc.
  13. Balmaseda, Manuel & Melguizo, Angel & Taguas, David, 2006. "Las reformas necesarias en el sistema de pensiones contributivas en España
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    ," MPRA Paper 19574, University Library of Munich, Germany, revised 01 Mar 2006.
  14. 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.
  15. Conde-Ruiz, J. Ignacio & Gonzalez, Clara I., 2012. "Spain 2011 Pension Reform," Working Papers 2012-03, FEDEA.
  16. Julian Diaz Saavedra, 2013. "Age-dependent Taxation, Retirement Behavior, and Work Hours Over the Life Cycle," ThE Papers 13/09, Department of Economic Theory and Economic History of the University of Granada..
  17. J. Ignacio García Pérez & Alfonso R Sánchez Martín, 2008. "Social Security and the search behaviour of workers approaching retirement," Working Papers 08.03, Universidad Pablo de Olavide, Department of Economics.
  18. Javier Diaz-Gimenez & Julian Diaz-Saavedra, 2009. "Delaying Retirement in Spain," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(1), pages 147-167, January.
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