RT info:eu-repo/semantics/article
T1 The endogenous determination of retirement age and Social Security benefits
A1 Cabo García, Francisco José
A1 García González, Ana
K1 Differential games
K1 Pension systems
K1 Public pension system
K1 effective retirement age
K1 differential games
K1 credibility of incentive equilibrium
AB An ageing population in modern societies has put stress on publicpension systems. To prevent Social Security deficits from increasing tounbounded stocks of public debt we focus on two policies: reducing thegenerosity of pension benefits, determined by the government, and post-poning the effective retirement age, chosen by employees. An atomisticemployee would disregard the effect of his retirement decision on the publicdebt and would retire as soon as possible. Conversely, an ideal farsightedagency considering all current and future employees would postpone re-tirement, thereby alleviating the pressure on public debt and allowingfor a more generous long-run pension. The government may design aproper incentive strategy to induce myopic atomistic decision-makers, toact non-myopically. This strategy is a two-part incentive with non-lineardependence on the stock of public debt. It is credible if deceiving em-ployees slightly adjust their retirement age decisions to increments in thepublic debt.
PB Cambridge University Press
SN 1365-1005 (Print), 1469-8056 (Online)
YR 2014
FD 2014
LK http://uvadoc.uva.es/handle/10324/32333
UL http://uvadoc.uva.es/handle/10324/32333
LA spa
NO Macroeconomic Dynamics, 18, pp. 93-113.
NO Producción Científica
DS UVaDOC
RD 23-nov-2024