TY  - UNPD
A1  - Börsch-Supan, Axel
A1  - Härtl, Klaus
A1  - Leite, Duarte N.
A1  - Ludwig, Alexander
T1  - Endogenous retirement behavior of heterogeneous households
under pension reforms
T2  - SAFE working paper series ; No. 221
N2  - We propose a unified framework to measure the effects of different reforms of the pension system on retirement ages and macroeconomic indicators in the face of demographic change. A rich overlapping generations (OLG) model is built and endogenous retirement decisions are explicitly modeled within a public pension system. Heterogeneity with respect to consumption preferences, wage profiles, and survival rates is embedded in the model. Besides the expected direct effects of these reforms on the behavior of households, we observe that feedback effects do occur. Results suggest that individual retirement decisions are strongly influenced by numerous incentives produced by the pension system and macroeconomic variables, such as the statutory eligibility age, adjustment rates, the presence of a replacement rate, and interest rates. Those decisions, in turn, have several impacts on the macro-economy which can create feedback cycles working through equilibrium effects on interest rates and wages. Taken together, these reform scenarios have strong implications for the sustainability of pension systems. Because of the rich nature of our unified model framework, we are able to rank the reform proposals according to several individual and macroeconomic measures, thereby providing important support for policy recommendations on pension systems.
T3  - SAFE working paper - 221 
KW  - population aging
KW  - pension reform
KW  - social security
KW  - life-cycle behavior
KW  - labor supply
KW  - retirement age
KW  - welfare
Y1  - 2018
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/47233
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-472334
UR  - https://ssrn.com/abstract=3235142
IS  - This draft: 25 April 2018
PB  - SAFE
CY  - Frankfurt am Main
ER  -