Consequences of a boost of mandatory retirement age on long run income and PAYG pensions
In this paper we study the effects of a boost of the mandatory retirement age, which is largely advocated in most countries facing with both the decline in the labour force participation of elderly workers and the increasing population ageing. It is shown, in the basic two-period overlapping generations model of growth (Diamond, 1965), that the postponement of the retirement age may be harmful for long run income and when the capital’s share is sufficiently high even PAYG pensions are reduced. In conclusion, since it is shown that the age of retirement might be reduced obtaining a higher income and even higher pension benefits, then our results suggest that the idea that a higher mandatory age of retirement is always beneficial in the long run for income and pension payments is theoretically controversial.
|Date of creation:||01 Sep 2012|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +39 050 22 16 466
Fax: +39 050 22 16 384
Web page: http://www.ec.unipi.it
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Peter Diamond, 2007. "Top-heavy load: Trouble ahead for social security systems, Introduction by Peter A. Diamond," CESifo Forum, Ifo Institute for Economic Research at the University of Munich, vol. 8(3), pages 28-36, October.
- Conde-Ruiz, José Ignacio & Galasso, Vincenzo, 2003.
"The Macroeconomics of Early Retirement,"
CEPR Discussion Papers
3896, C.E.P.R. Discussion Papers.
- J. Ignacio Conde-Ruiz & Vincenzo Galasso, . "The Macroeconomic of Early Retirement," Working Papers 194, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- J. Ignacio Conde-Ruiz & Vincenzo Galasso, . "The Macroeconomics of Early Retirement," Working Papers 2003-05, FEDEA.
- Hans-Werner Sinn, 2013. "Introduction: relaunching Europe: problems, reform strategies and future options," CESifo Forum, Ifo Institute for Economic Research at the University of Munich, vol. 14(3), pages 08-13, October.
- repec:bgu:wpaper:228 is not listed on IDEAS
- Chakraborty, Shankha, 2004.
"Endogenous lifetime and economic growth,"
Journal of Economic Theory,
Elsevier, vol. 116(1), pages 119-137, May.
- Shankha Chakraborty, 2002. "Endogenous Lifetime and Economic Growth," University of Oregon Economics Department Working Papers 2002-03, University of Oregon Economics Department, revised 26 Jan 2002.
- Hans-Werner Sinn, 2011. "Introduction," CESifo Forum, Ifo Institute for Economic Research at the University of Munich, vol. 12(3), pages 09-17, December.
- Casamatta, Georges & Cremer, Helmuth & Pestieau, Pierre, 2003.
"Voting on Pensions with Endogenous Retirement Age,"
CEPR Discussion Papers
3778, C.E.P.R. Discussion Papers.
- Abu-Qarn, Aamer S. & Abu-Bader, Suleiman, 2007. "Sources of Growth Revisited: Evidence from Selected MENA Countries," World Development, Elsevier, vol. 35(5), pages 752-771, May.
- Bertrand Crettez & Patricia Le Maitre, 2002. "Optimal age of retirement and population growth," Journal of Population Economics, Springer, vol. 15(4), pages 737-755.
- Abdelhak Senhadji, 2000. "Sources of Economic Growth: An Extensive Growth Accounting Exercise," IMF Staff Papers, Palgrave Macmillan, vol. 47(1), pages 6.
- Philippe Michel & Pierre Pestieau, 2013.
"Social Security And Early Retirement In An Overlapping-Generations Growth Model,"
Annals of Economics and Finance,
Society for AEF, vol. 14(2), pages 723-737, November.
- MICHEL, Philippe & PESTIEAU, Pierre, 1999. "Social security and early retirement in an overlapping-generations growth model," CORE Discussion Papers 1999051, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Juan Antonio Lacomba & Francisco Miguel Lagos, 2005.
"Population Aging and Legal Retirement Age,"
05/16, Department of Economic Theory and Economic History of the University of Granada..
- Hu, Sheng Cheng, 1979. "Social Security, the Supply of Labor, and Capital Accumulation," American Economic Review, American Economic Association, vol. 69(3), pages 274-83, June.
- Tito Boeri & Axel Boersch-Supan & Guido Tabellini, 2002. "Pension Reforms and the Opinions of European Citizens," American Economic Review, American Economic Association, vol. 92(2), pages 396-401, May.
- repec:cup:cbooks:9780521001151 is not listed on IDEAS
- Luciano Fanti & Luca Gori, 2009. "Longevity, fertility and PAYG pension systems sustainability," Discussion Papers 2009/77, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
- Lazear, Edward P, 1979. "Why Is There Mandatory Retirement?," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1261-84, December.
- Momota, Akira, 2003. "A retirement decision in the presence of a social security system," Journal of Macroeconomics, Elsevier, vol. 25(1), pages 73-86, March.
- repec:ebl:ecbull:v:10:y:2008:i:2:p:1-8 is not listed on IDEAS
- Miles, David, 1999.
"Modelling the Impact of Demographic Change upon the Economy,"
Royal Economic Society, vol. 109(452), pages 1-36, January.
- Miles, David K, 1997. "Modelling the Impact of Demographic Change Upon the Economy," CEPR Discussion Papers 1762, C.E.P.R. Discussion Papers.
- Fanti, Luciano & Gori, Luca, 2010. "Increasing PAYG pension benefits and reducing contribution rates," Economics Letters, Elsevier, vol. 107(2), pages 81-84, May.
- Luca Gori & Luciano Fanti, 2008. "Longevity and PAYG pension systems sustainability," Economics Bulletin, AccessEcon, vol. 10(2), pages 1-8.
- Robert J. Barro & Xavier Sala-i-Martin, 2003. "Economic Growth, 2nd Edition," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262025531, June.
When requesting a correction, please mention this item's handle: RePEc:pie:dsedps:2012/149. 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: ()
If references are entirely missing, you can add them using this form.