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Growth, PAYG pension systems crisis and mandatory age of retirement

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  • Luciano Fanti

Abstract

Since in many countries - plagued by low fertility - significant increases of the mandatory retirement age have been recently introduced with the declared objective to sustain PAYG pension budgets, then in this paper we investigate whether and how such boosts are effective. It is shown - in the basic two-period overlapping generations model of endogenous growth, which is maybe the toy-model most used for pension policy analyses - that the postponement of the retirement age is always harmful for growth and even for pension payments. Therefore this result suggests that the effects of boosts of mandatory retirement ages for sustaining PAYG pension budgets may not be warranted.

Suggested Citation

  • Luciano Fanti, 2012. "Growth, PAYG pension systems crisis and mandatory age of retirement," Discussion Papers 2012/153, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
  • Handle: RePEc:pie:dsedps:2012/153
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    References listed on IDEAS

    as
    1. 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.
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    Cited by:

    1. Cipriani, Giam Pietro & Pascucci, Francesco, 2018. "Pension Policies in a Model with Endogenous Fertility," IZA Discussion Papers 11511, Institute for the Study of Labor (IZA).
    2. repec:cuf:journl:y:2018:v:19:i:1:stauvermann:hu is not listed on IDEAS

    More about this item

    Keywords

    Retirement age; Pensions; OLG model;

    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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