An evaluation of the life-cycle effects of minimum pensions on retirement behaviour: Extended Version

Sergi Jimenez-Martin and Alfonso R Sánchez-Martín ()
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Alfonso R Sánchez-Martín: Department of Economics, Universidad Pablo de Olavide
Authors registered in the RePEc Author Service: Alfonso Ramon Sanchez Martin ()

No 06.23, Working Papers from Universidad Pablo de Olavide, Department of Economics

Abstract: In this paper we explore the effects of the minimum pension program on welfare and retirement in Spain. This is done with a stylized life-cycle model which provides a convenient analytical characterization of optimal behavior. We use data from the Spanish Social Security to estimate the behavioral parameters of the model and then simulate the changes induced by the minimum pension in aggregate retirement patterns. The impact is substantial: there is a threefold increase in retirement at 60 (the age of first entitlement) with respect to the economy without minimum pensions, and total early retirement (before or at 60) is almost 50% larger.

Keywords: Retirement; life cycle model; minimum pension; structural estimation (search for similar items in EconPapers)
JEL-codes: D91 H55 J26 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2006-09
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Forthcoming in Journal of Applied Econometrics

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Persistent link: https://EconPapers.repec.org/RePEc:pab:wpaper:06.23

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