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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.

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File URL: http://www1.vwa.unisg.ch/RePEc/usg/econwp/EWP-1119.pdf
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Paper provided by University of St. Gallen, School of Economics and Political Science in its series Economics Working Paper Series with number 1119.

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Length: 38 pages
Date of creation: May 2011
Date of revision:
Handle: RePEc:usg:econwp:2011:19
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  1. Lindbeck, Assar & Persson, Mats, 2002. "The Gains from Pension Reform," Working Paper Series 580, Research Institute of Industrial Economics.
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  17. Feldstein, Martin, 2005. "Structural Reform of Social Security," Scholarly Articles 2794830, Harvard University Department of Economics.
  18. Reyes Hartley, Gonzalo & van Ours, Jan C. & Vodopivec, Milan, 2010. "Incentive Effects of Unemployment Insurance Savings Accounts: Evidence from Chile," IZA Discussion Papers 4681, Institute for the Study of Labor (IZA).
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  26. Robert Fenge & Pierre Pestieau, 2005. "Social Security and Early Retirement," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262062496, June.
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  28. 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.
  29. Roland Demmel & Christian Keuschnigg, 2000. "Funded Pensions and Unemployment," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 57(1), pages 22-, September.
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  33. Keuschnigg, Christian, 1994. "Dynamic tax incidence and intergenerationally neutral reform," European Economic Review, Elsevier, vol. 38(2), pages 343-366, February.
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