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Early Retirement, Social Security, and Output Gap

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 14/01, ThE Papers from Department of Economic Theory and Economic History of the University of Granada.

Abstract: We analyze two social security reforms aimed at increasing working lifetimes. The rst reform elim- inates early retirement provisions, while the second increases both the age of early eligibility and the normal retirement age. We nd that although both reforms increase the participation rates of older workers, the elimination of early retirement provisions reduces future social security imbalances if ben- e ts taken early are not reduced actuarially. Additionally, we nd that both reforms increase aggregate hours and output, although eciency gains derived from the elimination of the early retirement scheme are distant from previous estimates since labor supply could be less responsive. Finally, we also nd that the output gap brought about by the early retirement scheme may decrease in coming decades.

Keywords: Computable general equilibrium; social security reforms; macroeconomic e ects; retirement. (search for similar items in EconPapers)
JEL-codes: C68 H55 J11 J26 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2014-01-09
New Economics Papers: this item is included in nep-age and nep-lab
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