FAIR RETIREMENT UNDER RISKY LIFETIME*

Marc Fleurbaey, Marie-Louise Leroux, Pierre Pestieau and Gregory Ponthiere

International Economic Review, 2016, vol. 57, issue 1, 177-210

Abstract: A premature death unexpectedly brings a life and a career to their end, leading to substantial welfare losses. We study the retirement decision in an economy with risky lifetime and compare the laissez‐faire with egalitarian social optima. We consider two social objectives: (1) the maximin on expected lifetime welfare, allowing for a compensation for unequal life expectancies, and (2) the maximin on realized lifetime welfare, allowing for a compensation for unequal lifetimes. The latter optimum involves, in general, decreasing lifetime consumption profiles as well as raising the retirement age. This result is robust to the introduction of unequal life expectancies and unequal productivities.

Date: 2016
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Citations: View citations in EconPapers (17)

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https://doi.org/10.1111/iere.12152

Related works:
Working Paper: Fair Retirement Under Risky Lifetime (2016)
Working Paper: Fair retirement under risky lifetime (2016)
Working Paper: Fair retirement under risky lifetime (2016)
Working Paper: Fair retirement under risky lifetime (2013)
Working Paper: Fair Retirement Under Risky Lifetime (2013)
Working Paper: Fair Retirement Under Risky Lifetime (2013)
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