Labor Supply and Retirement Policy in an Overlapping Generations  Model with Stochastic Fertility

Jorgensen, Ole Hagen; Jensen, Svend E. Hougaard

Labor Supply and Retirement Policy in an Overlapping Generations Model with Stochastic Fertility

2010

Jorgensen, Ole Hagen | Jensen, Svend E. Hougaard

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.

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Mots clés AGROVOC

babies baby debt dependency ratio economic growth economic implications elasticity elderly fertility growth rate human capital imperfect competition labour market equilibrium pension population dynamics population growth productivity retirement social security taxation wage rate workers working hours

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D'autres materias

Wealth; Future research; Indexation; Low fertility; General equilibrium; Declines in fertility; Policy research; Discount rate; Lower fertility; Number of children; Changes in fertility; Economic decisions; Progress; Number of workers; Political economy; Longevity adjustment; Retirement periods; Payroll tax; Early retirement; Population growth rate; Labor force; Labor supply; Opportunity cost; Policy response; Endogenous variables; Real wages; Economic theory; Fertility decline; Replacement rate; Consumption increases; Tax rate; Pension contributions; Pension contribution; Decline in fertility; Overlapping generations model; Aggregate income; Labor economics; Dependency ratios; Social security reform; Exogenous shock; Retirement policy; Labor forces; Fertility rate; Baby boom; Retirement period; Respect; Rate of growth; Business cycle; Worker; Pension systems; Policy makers; Innovations; Policy research working paper; Contribution rate; Optimization; Exogenous variable; Policy framework; Fertility rates; Downward pressure; Allocation of resources; Demographic trends; Pension system; Elasticity of substitution; Retirement age; Retirees; Capital investment; Utility function; Gross return

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Policy Research working paper ; no. WPS 5382http://creativecommons.org/licenses/by/3.0/us/World BankCreative Commons Attribution CC BY 3.0

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Policy Research working paper ; no. WPS 5382

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http://hdl.handle.net/10986/3867

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Labor Supply and Retirement Policy in an Overlapping Generations Model with Stochastic Fertility

2010

Mots clés AGROVOC

Informations bibliographiques