IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp536.html
   My bibliography  Save this paper

Pension Taxes versus Early Retirement Rights

Author

Listed:
  • Orszag, Mike

    () (Towers Watson)

  • Snower, Dennis J.

    () (Kiel Institute for the World Economy)

Abstract

This paper deals with two policy approaches to address the problem of the “pensions time bomb” by influencing private-sector pension provision. In assessing the role of private-sector pensions, it is common to concentrate exclusively on the issue of whether early retirement penalties or late retirement benefits are actuarially fair. We argue that this focus is unbalanced since private-sector pension arrangements have significant implications for governments' finances. When private pensions encourage early retirement, they reduce the number of people paying taxes and increase the number of people supplementing their private pensions through various forms of public support. To induce private-sector pension providers to internalize this externality, we examine two policy responses: taxing private pension receipts of early retirees, and issuing “early retirement rights.” The government’s receipts from the pension taxes or the sale of early retirement rights are used, in part, to provide employment vouchers for people of pensionable age.

Suggested Citation

  • Orszag, Mike & Snower, Dennis J., 2002. "Pension Taxes versus Early Retirement Rights," IZA Discussion Papers 536, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp536
    as

    Download full text from publisher

    File URL: http://ftp.iza.org/dp536.pdf
    Download Restriction: no

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Karakaya, Güngör, 2008. "Early cessation of activity in the labour market: impact of supply and demand factors," MPRA Paper 13390, University Library of Munich, Germany.

    More about this item

    Keywords

    pensions; employment; taxes; early retirement;

    JEL classification:

    • H1 - Public Economics - - Structure and Scope of Government
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H6 - Public Economics - - National Budget, Deficit, and Debt

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:iza:izadps:dp536. 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: (Mark Fallak). General contact details of provider: http://www.iza.org .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.