Early Retirement

J. Ignacio Conde-Ruiz and Vincenzo Galasso

Review of Economic Dynamics, 2003, vol. 6, issue 1, 12-36

Abstract: Generous early retirement provisions account for a large proportion of the drop in the labor force participation of elderly workers. The aim of this paper is to provide a positive theory of early retirement. We suggest that the political support for generous early retirement provisions relies on: (i) the existence of a significant group of elderly workers with incomplete working history, who are not entitled to an old age pension; and (ii) the intragenerational redistribution built in this provision via the utility from leisure that induces low-ability workers to retire early. The majority which supports early retirement in a bidimensional voting game is composed of elderly with incomplete working history and low-ability workers; social security is supported by retirees and low-ability workers. (Copyright: Elsevier)

Keywords: Social security; Policy persistence; Structure-induced equilibrium (search for similar items in EconPapers)
JEL-codes: D72 H53 H55 (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (84)

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Working Paper: Early Retirement (2000)
Working Paper: Early Retirement (2000)
Working Paper: Early retirement
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DOI: 10.1016/S1094-2025(02)00018-2

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