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The endogenous determination of retirement age and Social Security benefits Cabo García, Francisco José García González, Ana Differential games Pension systems Producción Científica An ageing population in modern societies has put stress on public pension systems. To prevent Social Security deficits from increasing to unbounded stocks of public debt we focus on two policies: reducing the generosity of pension benefits, determined by the government, and post- poning the effective retirement age, chosen by employees. An atomistic employee would disregard the effect of his retirement decision on the public debt and would retire as soon as possible. Conversely, an ideal farsighted agency considering all current and future employees would postpone re- tirement, thereby alleviating the pressure on public debt and allowing for a more generous long-run pension. The government may design a proper incentive strategy to induce myopic atomistic decision-makers, to act non-myopically. This strategy is a two-part incentive with non-linear dependence on the stock of public debt. It is credible if deceiving em- ployees slightly adjust their retirement age decisions to increments in the public debt. 2018-10-25T17:38:43Z 2018-10-25T17:38:43Z 2014 info:eu-repo/semantics/article Macroeconomic Dynamics, 18, pp. 93-113. 1365-1005 (Print), 1469-8056 (Online) http://uvadoc.uva.es/handle/10324/32333 10.1017/S1365100512000296 93 113 Macroeconomic Dynamics 18 spa https://www.cambridge.org/core/journals/macroeconomic-dynamics/article/endogenous-determination-of-retirement-age-and-social-security-benefits/9EE091C1A9DC1379CEF4202FB4E21EA7 info:eu-repo/semantics/openAccess Cambridge University Press SI