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Age-dependent Taxation, Retirement Behavior, and Work Hours Over the Life Cycle

Julian Diaz Saavedra ()
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Julian Diaz Saavedra: Department of Economic Theory and Economic History, University of Granada.

Authors registered in the RePEc Author Service: Julián Díaz-Saavedra ()

No 13/09, ThE Papers from Department of Economic Theory and Economic History of the University of Granada.

Abstract: We use a computable overlapping generations model economy, which matches the stylized facts con- cerning retirement behavior, to analyze the consequences of three reforms designed to reduce tax rates on the labor supply of older workers. We nd that these reforms increase the participation rates of the elderly and show that the gains, in terms of old age work hours, are non-trivial. However, we also nd that the total labor supply response to the reforms is not so much an increase in total lifetime hours as it is a reallocation of hours over the life cycle. Finally, we show that these reforms, designed to increase the length of the working life of individuals, may not increase output.

Keywords: Computable general equilibrium; labor supply; retirement; age-dependent taxation. (search for similar items in EconPapers)
JEL-codes: C68 J22 J26 H31 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2013-09-25
New Economics Papers: this item is included in nep-age, nep-dem, nep-dge, nep-lab, nep-lma and nep-pbe
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