A retirement decision in the presence of a social security system

Momota, Akira

doi:10.1016/s0164-0704(03)00007-7

Cited by 4 publications

(4 citation statements)

References 14 publications

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“…Much has been written on PAYG pensions in an overlapping generation (OLG) frame (to mention only some more recent articles, see Fanti and Gori, ; Miyazaki, ; Cipriani, ). However, while the literature has largely developed—especially in the framework of the two‐period OLG model—a normative analysis of the optimal retirement age (Hu, ; Marchand et al ., ; Michel and Pestieau, ; Crettez and Le Maitre, ; Momota, ; Lacomba and Lagos, ) as well as models of political games for voting on the age of retirement (Conde‐Ruiz and Galasso, ; Casamatta et al ., ), what seems to be less extensively investigated is a positive analysis of the effects of the often advocated mandatory postponement of the retirement age on both economic growth and sustainability of PAYG pension systems.…”

Section: Introductionmentioning

confidence: 99%

Raising the Mandatory Retirement Age and its Effect on Long‐run Income and Pay‐as‐you‐go (PAYG) Pensions

Fanti

2014

Metroeconomica

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In this paper we study the effects of raising the mandatory retirement age in the neoclassical growth model context. It is shown that postponement of the retirement age may be harmful for long-run income and even for pensions. Our findings show that the retirement age might be reduced, thereby obtaining a higher income and even higher pension benefits. This suggests that the idea that a higher mandatory age of retirement is always beneficial in the long run for income and pension payments is theoretically controversial.

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Section: Introductionmentioning

confidence: 99%

Raising the Mandatory Retirement Age and its Effect on Long‐run Income and Pay‐as‐you‐go (PAYG) Pensions

Fanti

2014

Metroeconomica

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“…, to separately finance health investments and public pensions, respectively. Therefore, the first-period budget constraint of individuals of generation t reads as follows: when he/she retires (see, e.g., Hu [52], Momota [53]) because of ill-health. This amounts to say that the total retirement benefit depends on both the pension entitlement p and length of retirement d  1…”

Section: Individualsmentioning

confidence: 99%

Complex dynamics in an OLG model of neoclassical growth with endogenous retirement age and public pensions

Fanti

Gori

Sodini

2013

Nonlinear Analysis: Real World Applications

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“…Our results suggest that endogenizing an old agent's retirement age may affect the relationship between the pay-as-you-go social security tax rate and the fertility rate. Meanwhile, Hu (1979), Momota (2003), Fenge and Pestieau (2005), Michel and Pestieau (2013), Chen (2018), Miyazaki (2019), Cipriani and Fioroni (2021), and others analyze the relationship between pay-asyou-go social security and an old agent's labor supply or decision regarding retirement. Hu (1979) andMomota (2003) investigate how the length of the retirement period changes at equilibrium as the pension tax rate and pension benefits change, although they do not consider the case of no labor supply for old agents.…”

Section: Introductionmentioning

confidence: 99%

“…Meanwhile, Hu (1979), Momota (2003), Fenge and Pestieau (2005), Michel and Pestieau (2013), Chen (2018), Miyazaki (2019), Cipriani and Fioroni (2021), and others analyze the relationship between pay-asyou-go social security and an old agent's labor supply or decision regarding retirement. Hu (1979) andMomota (2003) investigate how the length of the retirement period changes at equilibrium as the pension tax rate and pension benefits change, although they do not consider the case of no labor supply for old agents. Because our model is more tractable than theirs, we include the condition of an old agent's labor productivity under which he or she supplies no labor and above which he or she supplies a positive amount of labor.…”

Section: Introductionmentioning

confidence: 99%

Pay-as-You-Go Social Security and Educational Subsidy in an Overlapping Generations Model with Endogenous Fertility and Endogenous Retirement

Chen

Miyazaki

2021

The B.E. Journal of Macroeconomics

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This study analytically investigates the effects of pay-as-you-go social security and educational subsidies on the fertility rate, retirement age, and GDP per capita growth rate in an overlapping generations model, where parents invest resources toward their children’s human capital. We find that an old agent retires fully when his or her labor productivity is low and retires later when the labor productivity is high. Under the unique balanced-growth-path (BGP) equilibrium, when an old agent is still engaged in work, tax rates are neutral to the fertility rate, higher tax rates encourage him or her to retire earlier, a higher social security tax rate depresses the GDP per capita growth rate, and a higher tax rate for educational subsidies can accelerate growth. However, when an old agent fully retires, higher tax rates increase the fertility rate, a higher social security tax rate lowers the GDP per capita growth rate, and a higher tax rate for educational subsidies boosts growth. Additionally, if an old agent’s labor productivity increases, the fertility rate also increases. We also conduct numerical simulations and analyze how an old agent’s labor productivity affects the retirement age, fertility rate, and GDP per capita growth rate under the BGP equilibrium.

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A retirement decision in the presence of a social security system

Cited by 4 publications

References 14 publications

Raising the Mandatory Retirement Age and its Effect on Long‐run Income and Pay‐as‐you‐go (PAYG) Pensions

Raising the Mandatory Retirement Age and its Effect on Long‐run Income and Pay‐as‐you‐go (PAYG) Pensions

Complex dynamics in an OLG model of neoclassical growth with endogenous retirement age and public pensions

Pay-as-You-Go Social Security and Educational Subsidy in an Overlapping Generations Model with Endogenous Fertility and Endogenous Retirement

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