Labor Market Search and Optimal Retirement Policy

Joydeep Bhattacharya, Casey Muligan and Robert R. Reed

ISU General Staff Papers from Iowa State University, Department of Economics

Abstract: A popular and long‐standing view is that social security is a means for young, unemployed people to “purchase” jobs from older workers. Can social security, by encouraging retirement and hence creating job vacancies for the young, improve the allocation of workers to jobs? Maybe, according to a standard model of labor market search, but public retirement programs currently pay the elderly substantially more than their jobs are worth. An important effect is that retirement reduces the value of other vacant jobs. Our results imply that recent reforms aimed at reducing retirement incentives are likely to improve labor market efficiency.

Date: 2004-10-01
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Related works:
Journal Article: Labor Market Search and Optimal Retirement Policy (2004)
Working Paper: Labor Market Search and Optimal Retirement Policy (2003)
Working Paper: Labor market search and optimal retirement policy (2001)
Working Paper: Labor Market Search and Optimal Retirement Policy (2001)
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