The incentive effects of minimum pensions

Sergi Jimenez-Martin

IZA World of Labor, 2014, No 84, 84

Abstract: The main purpose of minimum pension benefit programs and old-age social assistance programs is to guarantee a minimum standard of living after retirement and thus to alleviate poverty in old age. In many developing and developed countries, the minimum pension program is a key welfare program and a major influence on the retirement decisions of low-income workers and workers with erratic work histories. The design of many minimum pension programs tends to create strong incentives for low-income workers to retire as soon as they become eligible for the program, which is often earlier than the normal retirement age.

Keywords: retirement; incentives to retire; life-cycle model; minimum pension (search for similar items in EconPapers)
JEL-codes: D91 H55 H75 J22 J26 (search for similar items in EconPapers)
Date: 2014
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