A life-cycle analysis of ending mandatory retirement

Koka, Katerina and Kosempel, Stephen (2014): A life-cycle analysis of ending mandatory retirement. Published in: Economic Modelling , Vol. 38, (February 2014): pp. 57-66.

Abstract

In this paper a life-cycle model is constructed to study the macroeconomic effects and welfare implications associated with eliminating mandatory retirement. Our short run analysis reveals that changes in welfare during the transition depend on the dynamic nature of the wage rate adjustment process. We distinguish between transitions in which the wage rate clears the labour market and transitions with a sticky wage and youth unemployment. We also examine political feasibility by measuring the popular support that this type of policy might have under the two labour market scenarios. Finally, we identify the effects that the policy has on welfare in the long run.

• Item Type: MPRA Paper
• Language: English
• Keywords: Mandatory retirement; Transitional Analysis
• Subjects: 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; E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E61 - Policy Objectives ; Policy Designs and Consistency ; Policy Coordination

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