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Labour market regulation and retirement age


  • M. Magnani



Pension system and labor market reforms are widely debated issues in all industrialized countries and especially in Europe; any change over these two aspects of the Social Security System indeed, can affect heavily the functioning of the whole economy.A preminent role in this sense is played by employment protection regulation and by the mandatory retirement age; in this paper I focus on the political economy of such social policies jointly and consider the interaction between the choice over the protection of the employees in the labour market and that over retirement age. In particular, I look at the effects of the turnover generated either by temporary, selective exits due to the dynamic of the labour market or by permanent, non-selective exits due to retirements. The degree of employment protection and the mandatory retirement age emerge as a result of the political bargaining between three social groups: young, high and low prductivity old. Workforce composition in this setting defines the efficiency of the economy and determine the rise of a social consensus towards different assets of the Social Security System

Suggested Citation

  • M. Magnani, 2005. "Labour market regulation and retirement age," Economics Department Working Papers 2005-EP02, Department of Economics, Parma University (Italy).
  • Handle: RePEc:par:dipeco:2005-ep02

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    References listed on IDEAS

    1. Casey B. Mulligan & Xavier Sala-i-Martin, 1999. "Gerontocracy, retirement, and social security," Economics Working Papers 383, Department of Economics and Business, Universitat Pompeu Fabra.
    2. Axel Börsch-Supan & Tito Boeri & Guido Tabellini, 2002. "Would you Like to Reform the Pension System?," MEA discussion paper series 02007, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
    3. Persson, Torsten & Tabellini, Guido, 1999. "Political economics and macroeconomic policy," Handbook of Macroeconomics,in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 22, pages 1397-1482 Elsevier.
    4. Tito Boeri & Axel Börsch-Supan & Guido Tabellini, 2001. "Would you like to shrink the welfare state? A survey of European citizens," Economic Policy, CEPR;CES;MSH, vol. 16(32), pages 7-50, April.
    5. Conde-Ruiz, Jose Ignacio & Galasso, Vincenzo, 2005. "Positive arithmetic of the welfare state," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 933-955, June.
    6. Tito Boeri & J. Ignacio Conde-Ruiz & Vincenzo Galasso, "undated". "Protecting Against Labour Market Risk: Employment Protection or Unemployment Benefits?," Working Papers 2003-17, FEDEA.
    7. J. Ignacio Conde-Ruiz & Vincenzo Galasso, 2003. "Early Retirement," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 6(1), pages 12-36, January.
    8. Laurence J. Kotlikoff & Robert W. Rosenthal, 1993. "Some Inefficiency Implications Of Generational Politics And Exchange," Economics and Politics, Wiley Blackwell, vol. 5(1), pages 27-42, March.
    9. Loewy, Michael B., 1988. "Equilibrium policy in an overlapping generations economy," Journal of Monetary Economics, Elsevier, vol. 22(3), pages 485-499.
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    Cited by:

    1. D. Tondani, 2006. "Estimating the effects of personal income tax on labour supply in Italy," Economics Department Working Papers 2006-EP03, Department of Economics, Parma University (Italy).

    More about this item


    social security; turnover on the labor market; political equilibria; employment protection; retirement age;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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