Labor supply and retirement policy in an overlapping generations model with stochastic fertility

Ole Hagen Jorgensen and Svend E. Hougaard Jensen

No 5382, Policy Research Working Paper Series from The World Bank

Abstract: Using a stochastic general equilibrium model with overlapping generations, this paper studies a policy rule for the retirement age aiming at offsetting the effects on the supply of labor following fertility changes. The authors find that the retirement age should increase more than proportionally to the direct fall in labor supply caused by a fall in fertility. The robustness of this result is checked against alternative model specifications and parameter values. The efficacy of the policy rule depends crucially on the link between the preference for leisure and the response of the intensive margin of labor supply to changes in the statutory retirement age. The model has subsequently been calibrated for Brazil by Jorgensen (2010), in the context of the Brazil Aging Study.

Keywords: Labor Markets; Labor Policies; Pensions&Retirement Systems; Economic Theory&Research; Population Policies (search for similar items in EconPapers)
Date: 2010-07-01
New Economics Papers: this item is included in nep-age, nep-dge and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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