Labor Supply and Retirement Policy in an Overlapping Generations Model with Stochastic Fertility
Using a stochastic general equilibrium model with overlapping generations, this paper studies a policy rule for the retirement age aiming at offsetting the effects on the supply of labor following fertility changes. The authors find that the retire...
| Main Authors: | , |
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| Language: | English |
| Published: |
2012
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| Subjects: | |
| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100727134920 http://hdl.handle.net/10986/3867 |
| Summary: | Using a stochastic general equilibrium
model with overlapping generations, this paper studies a
policy rule for the retirement age aiming at offsetting the
effects on the supply of labor following fertility changes.
The authors find that the retirement age should increase
more than proportionally to the direct fall in labor supply
caused by a fall in fertility. The robustness of this result
is checked against alternative model specifications and
parameter values. The efficacy of the policy rule depends
crucially on the link between the preference for leisure and
the response of the intensive margin of labor supply to
changes in the statutory retirement age. The model has
subsequently been calibrated for Brazil by Jorgensen (2010),
in the context of the Brazil Aging Study. |
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