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Aging, Labor Markets and Pension Reform in Austria

  • Keuschnigg Christian

    (University of St.Gallen)

  • Keuschnigg Mirela

    (University of St.Gallen)

This paper investigates the dynamic consequences of demographic change and various pension reform scenarios for Austria. The analysis is based on a computable overlapping generations model with life-cycle labor supply, savings, and search unemployment. The public sector is decomposed into general government and an unfunded pension system with a tax benefit linkage. Our quantitative analysis considers several pension reform scenarios on top of the demographic transition in an aging society. We find that lowering the pension replacement rate and increasing the retirement age can have strong labor market effects. They strengthen labor supply both in terms of job search intensity, leading to lower unemployment rates, and hours worked.

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Paper provided by EconWPA in its series GE, Growth, Math methods with number 0404002.

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Date of creation: 06 Apr 2004
Date of revision:
Handle: RePEc:wpa:wuwpge:0404002
Note: Type of Document - pdf. University of St.Gallen Economics Working Paper No 2004-03, January 2004
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  13. Lans Bovenberg, 2002. "Financing Retirement in the European Union," CESifo Working Paper Series 643, CESifo Group Munich.
  14. Assar Lindbeck & Mats Persson, 2003. "The Gains from Pension Reform," Journal of Economic Literature, American Economic Association, vol. 41(1), pages 74-112, March.
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  26. Roger E.A. Farmer, 1989. "Rince Preferences," UCLA Economics Working Papers 547, UCLA Department of Economics.
  27. Shi, Shouyong & Wen, Quan, 1997. "Labor market search and capital accumulation: Some analytical results," Journal of Economic Dynamics and Control, Elsevier, vol. 21(10), pages 1747-1776, August.
  28. Svend E. Hougaard Jensen & Morten I. Lau & Panu Poutvaara, 2004. "Efficiency and Equity Aspects of Alternative Social Security Rules," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 60(3), pages 325-, September.
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