Retirement Indexation in a Stochastic Model with Overlapping Generations and Endogenous Labour Supply

Ole Jørgensen

    Research output: Working paperResearch

    Abstract

    Using a stochastic overlapping generations model with endogenous labour supply, this paper studies the design and performance of a policy rule for the retirement age in response to fertility and mortality shocks. Two main results are derived: First, to oset a change in the labour force the retirement age should adjust more than proportionally to the fertility change and, second, to be socially desirable the retirement age should be indexed less than proportionally to changes in life expectancy.
    Original languageEnglish
    Place of PublicationFrederiksberg
    PublisherCentre for Economic and Business Research, Copenhagen Business School
    Number of pages29
    Publication statusPublished - 2009
    SeriesCEBR Discussion Paper
    Number2008-03

    Keywords

    • Retirement age
    • Endogenous labour supply
    • Overlapping generations
    • Intergenerational risk sharing
    • Method of undetermined coefficients

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