Flexible Retirement and Optimal Taxation

Abdoulaye Ndiaye

MPRA Paper from University Library of Munich, Germany

Abstract: This paper studies optimal insurance against idiosyncratic wage shocks in a life cycle model with intensive labor supply and endogenous retirement. When the fixed cost of work is increasing in wage, the optimal retirement wedge provides stronger incentives for delayed retirement with age. Retirement benefits that resemble the US Social Security system can implement the optimum. Calibrated numerical simulations suggest that a mix of retirement benefits that increase with claiming age, and age-dependent linear taxes, is close to optimal.

Keywords: Retirement; Optimal Taxation; Social Security (search for similar items in EconPapers)
JEL-codes: H21 H55 J26 (search for similar items in EconPapers)
Date: 2018, Revised 2020-08-14
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

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Related works:
Working Paper: Flexible Retirement and Optimal Taxation (2018)
Working Paper: Flexible Retirement and Optimal Taxation (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:102651

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