How Are Gains in Life Expectancy Shared between a Longer Career and a Longer Retirement Span?

Patrick Aubert and Simon Rabate

Documents de Travail de l'Insee - INSEE Working Papers from Institut National de la Statistique et des Etudes Economiques

Abstract: The 2003 French Pension Reform created a new rule, which implied that the career duration that is legally required for a full retirement pension should increase regularly over cohorts, proportionally to the gains in life expectancy after 60. This rule was explicitly targeting an objective of keeping constant, among all cohorts, the ratio of the length of career on the length of the duration span. In this paper, we simulate the evolution of retirement ages, average career durations and average retirement durations for all cohorts born between 1943 and 1990, in order to empirically assess in what extent this objective has been reached. Simulations are run using INSEEs dynamic microsimulation model (the DESTINIE model). Pension reforms from 2003 (including the 2010 et 2014 reforms) should have a sensible impact on retirement ages. Between the cohort born in 1943 and the one born in 1990, the average retirement duration should increase by a bit less than one third of the gains in life expectancy after 60, whereas this ratio should have been larger than three quarters without the reforms. Overall, the ratio between career duration and retirement duration does not remain strictly constant over cohorts, but only varies within a range of +/5 %.

Keywords: pension system; microsimulation (search for similar items in EconPapers)
JEL-codes: H55 J26 (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:nse:doctra:g2014-15

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