Retirement, Pensions, and Ageing

Ben Heijdra () and Ward Romp

No 1974, CESifo Working Paper Series from CESifo

Abstract: We study the effects of demographic shocks and changes in the pension system on the macroeconomic performance of an advanced small open economy. An overlapping-generations model is constructed which includes a realistic description of the mortality process. Individual agents choose their optimal retirement age, taking into account the time- and age profiles of wages, taxes, and the public pension system. The early retirement provision in most pension systems acts as a trap, inducing most workers to retire well before the normal retirement age. Simulations show that pension reform must be drastic for it to have any effects on the retirement behaviour of workers.

Keywords: retirement; pensions; ageing; demography; Gompertz-Makeham Law of mortality; overlapping generations; small open economy (search for similar items in EconPapers)
JEL-codes: D91 E10 F41 H55 J11 J26 (search for similar items in EconPapers)
Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Retirement, pensions, and ageing (2009)
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