Growth, PAYG pension systems crisis and mandatory age of retirement

Luciano Fanti

Discussion Papers from Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy

Abstract: Since in many countries - plagued by low fertility - significant increases of the mandatory retirement age have been recently introduced with the declared objective to sustain PAYG pension budgets, then in this paper we investigate whether and how such boosts are effective. It is shown - in the basic two-period overlapping generations model of endogenous growth, which is maybe the toy-model most used for pension policy analyses - that the postponement of the retirement age is always harmful for growth and even for pension payments. Therefore this result suggests that the effects of boosts of mandatory retirement ages for sustaining PAYG pension budgets may not be warranted.

Keywords: Retirement age; Pensions; OLG model (search for similar items in EconPapers)
JEL-codes: J26 O41 (search for similar items in EconPapers)
Date: 2012-09-01
New Economics Papers: this item is included in nep-age, nep-dem, nep-dge and nep-fdg
Note: ISSN 2039-1854
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Growth, PAYG pension systems crisis and mandatory age of retirement (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:pie:dsedps:2012/153

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