Alonso Ortiz, Jorge (2009): Social Security and Retirement across OECD Countries.
Download (238kB) | Preview
There are large differences in the employment to population ratio relative to the US across OECD countries, and these differences are even larger for the old age (55-69 years). There are also large differences in various features of social security, such as the replacement rate, the entitlement age or whether it is allowed to collect social security and working. These observations suggest that they might be an important factor. I assess quantitatively this hypothesis using a life cycle general equilibrium model of retirement. I find that the differences in social security can indeed account for the differences in employment to population ratio at old age in the OECD. I also evaluate which features of social security are most important in this context and find that generosity and whether it allows collecting social security while working are the most important contributors.
|Item Type:||MPRA Paper|
|Original Title:||Social Security and Retirement across OECD Countries|
|Keywords:||Social security, retirement, idiosyncratic labor income risk|
|Subjects:||J - Labor and Demographic Economics > J1 - Demographic Economics > J14 - Economics of the Elderly ; Economics of the Handicapped ; Non-Labor Market Discrimination
E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E24 - Employment ; Unemployment ; Wages ; Intergenerational Income Distribution ; Aggregate Human Capital ; Aggregate Labor Productivity
H - Public Economics > H5 - National Government Expenditures and Related Policies > H53 - Government Expenditures and Welfare Programs
J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J26 - Retirement ; Retirement Policies
|Depositing User:||Dr. Jorge Alonso Ortiz|
|Date Deposited:||12. Nov 2009 16:43|
|Last Modified:||22. Feb 2013 00:18|
Benitez-Silva, H. (2000) ``A Dynamic Model of Labor Supply, Consumption/Saving, and Annuity Decisions Under Uncertainty.'' SUNY-Stony Brook
Benitez-Silva, H. (2002) ``Job Search Behavior at the End of the Life Cycle.'' Center for Retirement Research Working Papers (Boston College)
Benitez-Silva, H. \& Heiland, F. (2006) ``The Social Security Earning Test Revisited: Information, Distortions, and Costs.'' SUNY-Stony Brook \& Florida State University
Blau, D.M. (2008) ``Retirement and Consumption in a Life Cycle Model.'' Journal of Labor Economics, 26 (1), (35-71)
Boskin, M. (1987) ``Too Many Promises: The Uncertain Future of Social Security.'' Dow Jones-Irwin.
Bullard, J. \& Feigenbum, J. (2007) ``A leisurely reading of the life-cycle consumption data.'' Journal of Monetary Economics 54 (2305-2320).
Chang, Y. \& Kim, S. (2006) ``From Individual to Aggregate Labor Supply: A Quantitative Analysis based on a Heterogeneous-Agent Macroeconomy,'' International Economic Review, 47 (1), (pp. 1-27)
De Nardi, M.C., Imrohoroglu, S. \& Sargent, T.J. (2001) ``Saving and Pension Reform in General Equilibrium Models.'' Oxford Review of Economic Policy, vol. 17 (1)
French, E. (2005) ``The Effects of Health, Wealth, and Wages on Labour Supply and Retirement Behavior.'' Review of Economic Studies, 72 (395-427)
French, E. (2007) ``The Effects of Health Insurance and Self-Insurance on Retirement Behavior'' Federal Reserve of Chicago.
Gruber, J. \& Wise, T. (2004) ``Social Security and Retirement around the World.'' NBER
Gruber, J. \& Wise, T. (2007) ``Social security programs and retirement around the world: Fiscal implications of reform.'' NBER
Gustman, A. \& Steinmeier, T. (1986) ``A Structural Retirement Model'' Econometrica, Vol. 54, No. 3, pages 555-584.
Hansen, G. (1993) ``The Cyclical and Secular Behaviour of the Labour Input: Comparing Efficiency Units and Hours Worked,'' Journal of Applied Econometrics, vol. 8 (1), (pp. 71-80)
Hotchkiss, J.L. (1991) ``The definition of Part-Time Employment: A Switching Regression Model with Unknown Sample Selection.'' International Economic Review, 32 (4) (pp. 899-917)
Hugget, M \& Ventura, G. (1999) ``On the Distributional Effects of Social Security Reform.'' Review of Economic Dynamics 2 (498-531).
Imrohoroglu, A., Imrohoroglu, S. \& Joines D. H. (1995) ``A life cycle analysis of social security.'' Economic Theory 6 (83-114)
Kotlicoff, L. \& Auerbach, A. (1987) ``Dynamic Fiscal Policy.'' Cambridge University Press.
Krussel, P. \& Smith, A. (1998) ``Income and Wealth Heterogeneity in the Macroeconomy.'' Journal of Political Economy, 106 (5)
McDaniel, C. (2009) ``Hours worked in the OECD 1960-2003: Driving forces and propagation mechanisms'' Kenyon College
Manoli, D. \& Wagner, M. (2007) ``Pension Benefits \& Retirement Decisions: Income vs. Price Effects.'' (Job Market Paper) Berkeley University.
Munnell, A.H. \& Sass S.A. (2007) ``The Labor Supply of Older Americans.'' Center for Retirement Research Working Papers (Boston College)
Nishiyama, S. \& Smetters, K. (2007) `` Does Social Security Privatization Produce Efficiency Gains?'' The Quarterly Journal of Economics, November (1677-1719)
Ohanian, L., Raffo, A. \& Rogerson, R. (2008) ``Long-term changes in labor supply and taxes: Evidence from OECD countries, 1956-2004'', Journal of Monetary Economics, Elsevier, vol. 55(8), pages 1353-1362, November.
Prescott (2004) ``Why do Americans Work so much Longer than Europeans?'' Quarterly Review, Federal Reserve Bank of Minneapolis, issue Jul, pages 2-13.
Prescott, Rogerson \& Wallenius (2009) ``Lifetime Aggregate Labor Supply with Endogenous Workweek Length'', Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(1), pages 23-36, January.
Ragan, K (2005) ``Taxes, Transfers and Time use: Fiscal Policy in a Household Production Model,'' November 2005.
Rogerson (2007) ``Taxation and Market Work: Is Scandinavia an Outlier?'' Economic Theory, Springer, vol. 32(1), pages 59-85, July.
Rogerson \& Wallenius (2007) ``Micro and Macro Elasticities in a Life Cycle Model With Taxes'' NBER Working Paper No. 13017, April.
Wallenius (2009) ``Social Security and Cross-Country Hours: A General Equilibrium Analysis''. Job Market Paper.
Stock \& Wise (1990) ``The Option Value of Work and Retirement.'' Econometrica, Vol. 58, No. 5, pages 1151-1180.
Rust, J \& Pheland, C. (1997) ``How Social Security and Medicare Affect Retirement Behavior In a World of Incomplete Markets.'' Econometrica, Vol. 65, No. 4. (781-831)
Rust, J. (1999) ``Strategies for Incorporating Risk, Uncertainty, and Private Insurance Mechanisms in Models of Social Security.'' Yale University.
Skirbekk, V. (2004) ``Age and Individual Productivity: A Literature Survey'' Vienna Yearbook of Population Research, Vienna : Austrian Academy of Sciences Press: 133-153.
Storesletten, K., Telmer, C.I., Yaaron, A. (1999) ``The risk-sharing implications of alternative social security arrangements.'' Carnegie-Rochester Conference Series on Public Policy. Volume 50 (June) (213-259)