Uncertain demographics, longevity adjustment of the retirement age and intergenerational risk-sharing

Jensen, Svend E. Hougaard; Jorgensen, Ole Hagen

doi:10.1017/cbo9780511493393.016

Cited by 13 publications

(22 citation statements)

References 6 publications

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“…When adult life expectancy then increases further, the impact upon capital savings will be positive, in line with existing literature (e.g. Chakraborty, 2004;Jensen and Jorgensen, 2008a).…”

Section: Heterogeneity In Economic Behaviorsupporting

confidence: 88%

Macroeconomic and policy implications of population aging in Brazil

Jorgensen¹

2011

Policy Research Working Papers

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The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

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“…When adult life expectancy then increases further, the impact upon capital savings will be positive, in line with existing literature (e.g. Chakraborty, 2004;Jensen and Jorgensen, 2008a).…”

Section: Heterogeneity In Economic Behaviorsupporting

confidence: 88%

Macroeconomic and policy implications of population aging in Brazil

Jorgensen¹

2011

Policy Research Working Papers

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“…We believe that this fills an important gap in the academic literature. While a few papers have addressed aspects related to intergenerational redistribution following the introduction of longevity adjustment (see, for example, Andersen 2014; Jensen and Jørgensen 2008), the intragenerational dimension has, to our best knowledge, not been studied as extensively so far.…”

Section: Introductionmentioning

confidence: 99%

Longevity Adjustment of Retirement Age and Intragenerational Inequality

Jensen

Sveinsson²,

Zoëga

2020

Economica

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We find that segments of society that have shorter life expectancy can expect a lower income from their pensions and lifetime utility due to the longevity of other groups participating in the same pension scheme. Linking the pension age to average life expectancy magnifies the negative effect on the lifetime utility of those who suffer low longevity. Furthermore, when the income of those with greater longevity increases, those with shorter life expectancy become even worse off. Conversely, when the income of those with shorter life expectancy increases, they end up paying more into the pension scheme, which benefits those who live longer. The relative sizes of the low‐ and high‐longevity groups in the population determine the magnitude of these effects. We calibrate the model based on data on differences in life expectancy of different socioeconomic groups and find that low‐income workers suffer from a 10–13% drop in pension benefits from being forced to pay into the same scheme as high‐income workers.

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“…This method is widely applied in the real business cycle literature (see e.g. Campbell, 1994;King et al, 2002or Uhlig, 1999, but it is also often used in stochastic overlapping generations models (see Bohn, 2009 or Jensen andJørgensen, 2008). The standard procedure used in these studies is to first derive the non-stochastic steady state and then to take first-order Taylor approximations around this steady state.…”

Section: Introductionmentioning

confidence: 99%

Retirement Flexibility and Portfolio Choice in General Equilibrium

2011

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract This paper explores the interaction between retirement flexibility and portfolio choice in an overlapping-generations model of a closed economy. Retirement flexibility is often seen as a hedge against capital market risks which justifies more risky asset portfolios. We show, however, that this positive relationship between risk taking and retirement flexibility is weakened -and under some conditions even turned around -if not only capital market risks but also productivity risks are considered. Productivity risk in combination with a high elasticity of substitution between consumption and leisure creates a positive correlation between asset returns and labour income, reducing the willingness of consumers to bear risk. Moreover, it turns out that general equilibrium effects can either increase or decrease the equity exposure, depending on the degree of substitutability between consumption and leisure. Terms of use: Documents in

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Uncertain demographics, longevity adjustment of the retirement age and intergenerational risk-sharing

Cited by 13 publications

References 6 publications

Macroeconomic and policy implications of population aging in Brazil

Macroeconomic and policy implications of population aging in Brazil

Longevity Adjustment of Retirement Age and Intragenerational Inequality

Retirement Flexibility and Portfolio Choice in General Equilibrium

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