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How Are Gains in Life Expectancy Shared between a Longer Career and a Longer Retirement Span?

Author

Listed:
  • P. AUBERT

    (Secrétariat général du Conseil d'orientation des retraites et Insee)

  • S. RABATÉ

    (PSE et Insee)

Abstract

The 2003 French Pension Reform created a new rule, which implied that the career duration that is legally required for a full retirement pension should increase regularly over cohorts, proportionally to the gains in life expectancy after 60. This rule was explicitly targeting an objective of keeping constant, among all cohorts, the ratio of the length of career on the length of the duration span. In this paper, we simulate the evolution of retirement ages, average career durations and average retirement durations for all cohorts born between 1943 and 1990, in order to empirically assess in what extent this objective has been reached. Simulations are run using INSEEs dynamic microsimulation model (the DESTINIE model). Pension reforms from 2003 (including the 2010 et 2014 reforms) should have a sensible impact on retirement ages. Between the cohort born in 1943 and the one born in 1990, the average retirement duration should increase by a bit less than one third of the gains in life expectancy after 60, whereas this ratio should have been larger than three quarters without the reforms. Overall, the ratio between career duration and retirement duration does not remain strictly constant over cohorts, but only varies within a range of +/5 %.

Suggested Citation

  • P. Aubert & S. Rabaté, 2014. "How Are Gains in Life Expectancy Shared between a Longer Career and a Longer Retirement Span?," Documents de Travail de l'Insee - INSEE Working Papers g2014-15, Institut National de la Statistique et des Etudes Economiques.
    • Handle: RePEc:nse:doctra:g2014-15
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    References listed on IDEAS

    as
    1. Sophie Buffeteau & Emmanuelle Crenner & Sylvie Le Minez & Didier Blanchet, 2011. "Le modèle de microsimulation Destinie 2 : principales caractéristiques et premiers résultats," Économie et Statistique, Programme National Persée, vol. 441(1), pages 101-121.
    2. Patrick Aubert & Cindy Duc & Bruno Ducoudré, 2013. "French Retirement Reforms and Intragenerational Equity in Retirement Duration," De Economist, Springer, vol. 161(3), pages 277-305, September.
    3. Marc Fleurbaey, 2002. "Retraites, générations et catégories sociales : de l'équité comme contrainte à l'équité comme objectif," Revue d'Économie Financière, Programme National Persée, vol. 68(4), pages 91-111.
    4. Stock, James H & Wise, David A, 1990. "Pensions, the Option Value of Work, and Retirement," Econometrica, Econometric Society, vol. 58(5), pages 1151-1180, September.
    Full references (including those not matched with items on IDEAS)

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    Keywords

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    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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