IDEAS home Printed from
MyIDEAS: Login to save this paper or follow this series

Life-Cycle Unemployment, Retirement and Parametric Pension Reform

  • Keuschnigg, Christian


  • Fisher, Walter


This paper investigates the consequences of pension reform for life-cycle unemployment and retirement. We find that (i) improving actuarial fairness in pension assessment not only boosts old age participation but also reduces unemployment among prime age workers and raises welfare; (ii) strengthening the tax benefit link boosts life-cycle labor supply on all margins and welfare; (iii) excluding unemployment benefits from the pension assessment base reduces unemployment, encourages later retirement and boosts efficiency; and (iv) extending the calculation period favors employment of young workers, might possibly lead to more unemployment among older ones, encourages postponed retirement and most likely yields positive welfare gains.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by University of St. Gallen, School of Economics and Political Science in its series Economics Working Paper Series with number 1119.

in new window

Length: 38 pages
Date of creation: May 2011
Date of revision:
Handle: RePEc:usg:econwp:2011:19
Contact details of provider: Postal: Dufourstrasse 50, CH - 9000 St.Gallen
Phone: +41 71 224 23 25
Fax: +41 71 224 31 35
Web page:

More information through EDIRC

References listed on IDEAS
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.:

as in new window
  1. CREMER, Helmuth & PESTIEAU, Pierre, . "The double dividend of postponing retirement," CORE Discussion Papers RP 1696, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. Martin Feldstein, 2005. "Rethinking Social Insurance," American Economic Review, American Economic Association, vol. 95(1), pages 1-24, March.
  3. Walter H. Fisher & Christian Keuschnigg, 2007. "Pension Reform and Labor Market Incentives," CESifo Working Paper Series 2057, CESifo Group Munich.
  4. Peter Diamond, 2004. "Social Security," American Economic Review, American Economic Association, vol. 94(1), pages 1-24, March.
  5. Lindbeck, Assar & Persson, Mats, 2002. "The Gains from Pension Reform," Seminar Papers 712, Stockholm University, Institute for International Economic Studies.
  6. Brown, Alessio J. G. & Orszag, Mike & Snower, Dennis J., 2006. "Unemployment Accounts and Employment Incentives," IZA Discussion Papers 2105, Institute for the Study of Labor (IZA).
  7. Martin Feldstein & Horst Siebert, 2002. "Social Security Pension Reform in Europe," NBER Books, National Bureau of Economic Research, Inc, number feld02-2, December.
  8. Hartley, G.R. & van Ours, J.C. & Vodopivec, M., 2010. "Incentive Effects of Unemployment Insurance Savings Accounts : Evidence from Chile," Discussion Paper 2010-04, Tilburg University, Center for Economic Research.
  9. P. A. Diamond & J. A. Mirrlees, 1977. "A Model of Social Insurance With Variable Retirement," Working papers 210, Massachusetts Institute of Technology (MIT), Department of Economics.
  10. Roland Demmel & Christian Keuschnigg, 2000. "Funded Pensions and Unemployment," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 57(1), pages 22-, September.
  11. Alessandro Cigno, 2006. "Is there a Social Security Tax Wedge?," CESifo Working Paper Series 1772, CESifo Group Munich.
  12. Eytan Sheshinski, 1977. "A Model of Social Security and Retirement Decisions," NBER Working Papers 0187, National Bureau of Economic Research, Inc.
  13. Martin Feldstein & Jeffrey B. Liebman, 2001. "Social Security," NBER Working Papers 8451, National Bureau of Economic Research, Inc.
    • Feldstein, Martin & Liebman, Jeffrey B., 2002. "Social security," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 32, pages 2245-2324 Elsevier.
  14. Martin Feldstein & Daniel Altman, 2007. "Unemployment Insurance Savings Accounts," NBER Chapters, in: Tax Policy and the Economy, Volume 21, pages 35-64 National Bureau of Economic Research, Inc.
  15. Feldstein, Martin & Samwick, Andrew A., 1992. "Social Security Rules and Marginal Tax Rates," National Tax Journal, National Tax Association, vol. 45(1), pages 1-22, March.
  16. Martin Feldstein, 2005. "Structural Reform of Social Security," Journal of Economic Perspectives, American Economic Association, vol. 19(2), pages 33-55, Spring.
  17. Jonathan Gruber & David A. Wise, 2004. "Introduction and Summary," NBER Chapters, in: Social Security Programs and Retirement around the World: Micro-Estimation, pages 1-40 National Bureau of Economic Research, Inc.
    • Jonathan Gruber & Kevin Milligan & David A. Wise, 2010. "Introduction and Summary," NBER Chapters, in: Social Security Programs and Retirement around the World: The Relationship to Youth Employment, pages 1-45 National Bureau of Economic Research, Inc.
  18. Lans Bovenberg, 2002. "Financing Retirement in the European Union," CESifo Working Paper Series 643, CESifo Group Munich.
  19. Calvo, Guillermo A & Obstfeld, Maurice, 1988. "Optimal Time-Consistent Fiscal Policy with Finite Lifetimes," Econometrica, Econometric Society, vol. 56(2), pages 411-32, March.
  20. Diamond Peter A & Orszag Peter R, 2005. "Saving Social Security: The Diamond-Orszag Plan," The Economists' Voice, De Gruyter, vol. 2(1), pages 1-9, April.
  21. Sveinbjörn Blöndal & Stefano Scarpetta, 1999. "The Retirement Decision in OECD Countries," OECD Economics Department Working Papers 202, OECD Publishing.
  22. Robert Fenge & Pierre Pestieau, 2005. "Social Security and Early Retirement," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262062496, June.
  23. Pierre Pestieau & Mathieu Lefèbvre & Alain Jousten & Sergio Perelman, 2008. "The Effects of Early Retirement on Youth Unemployment: The Case of Belgium," IMF Working Papers 08/30, International Monetary Fund.
  24. Friedrich Breyer & Stefan Hupfeld, 2007. "On the Fairness of Early Retirement Provisions," CESifo Working Paper Series 2078, CESifo Group Munich.
  25. N. Lesca, 2010. "Introduction," Post-Print halshs-00640602, HAL.
  26. Jonathan Gruber & David Wise, 2005. "Social Security Programs and Retirement around the World: Fiscal Implications, Introduction and Summary," NBER Working Papers 11290, National Bureau of Economic Research, Inc.
  27. Feldstein, Martin & Altman, Dan, 2007. "Unemployment Insurance Savings Accounts," Scholarly Articles 2960185, Harvard University Department of Economics.
  28. A. Bovenberg & Martin Hansen & Peter Sørensen, 2008. "Individual savings accounts for social insurance: rationale and alternative designs," International Tax and Public Finance, Springer, vol. 15(1), pages 67-86, February.
  29. Peter A. Diamond & Peter R. Orszag, 2005. "Saving Social Security," Journal of Economic Perspectives, American Economic Association, vol. 19(2), pages 11-32, Spring.
  30. J. E. Stiglitz, 1999. "Introduction," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 28(3), pages 249-254, November.
  31. Feldstein, Martin, 2005. "Structural Reform of Social Security," Scholarly Articles 2794830, Harvard University Department of Economics.
  32. Robert Fenge & Martin Werding, 2004. "Ageing and the tax implied in public pension schemes: simulations for selected OECD countries," Fiscal Studies, Institute for Fiscal Studies, vol. 25(2), pages 159-200, June.
  33. Philippe Robert-Demontrond & R. Ringoot, 2004. "Introduction," Post-Print halshs-00081823, HAL.
  34. Bovenberg, A.L. & Hansen, M. & Sorensen, P.B., 2008. "Individual savings accounts for social insurance : Rationale and alternative designs," Other publications TiSEM 72e236b0-ad63-4bea-a314-6, Tilburg University, School of Economics and Management.
  35. Keuschnigg, Christian, 1994. "Dynamic tax incidence and intergenerationally neutral reform," European Economic Review, Elsevier, vol. 38(2), pages 343-366, February.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:usg:econwp:2011:19. 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: (Martina Flockerzi)

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.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.