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On the long-run growth effect of raising the retirement age

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  • Kuhn, Michael
  • Prettner, Klaus

Abstract

We show that the long-run economic growth effect of an increase in the retirement age is unambiguously positive in research and development based endogenous growth models. This contrasts recent findings based on models of learning-by-doing-spillovers, in which an increase in the retirement age reduces physical capital accumulation and thereby economic growth. Our results imply that models based on learning-by-doing-spillovers, which are often used as a short-cut formulation for research and development based growth models, do not necessarily lead to similar policy conclusions.

Suggested Citation

  • Kuhn, Michael & Prettner, Klaus, 2016. "On the long-run growth effect of raising the retirement age," ECON WPS - Working Papers in Economic Theory and Policy 10/2016, TU Wien, Institute of Statistics and Mathematical Methods in Economics, Economics Research Unit.
    • Handle: RePEc:zbw:tuweco:102016
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    References listed on IDEAS

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    Cited by:

    1. Evsey T. Gurvich & Maria A. Ivanova, 2018. "Economic Effect of Population Ageing and Pension Reforms," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 5, pages 9-22, October.
    2. Thomas Ziesemer & Anne von Gässler, 2021. "Ageing, human capital and demographic dividends with endogenous growth, labour supply and foreign capital," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 20(2), pages 129-160, May.

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    More about this item

    Keywords

    demographic change; pension reform; long-run economic growth; R&D-based growth;
    All these keywords.

    JEL classification:

    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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