By: |
Hairault, Jean-Olivier (University of Paris I, EUREQUA, CEPREMAP and IZA Bonn);
Langot, François (University of Maine, GAINS and CEPREMAP);
Sopraseuth, Thepthida (University of Evry, EPEE and CEPREMAP) |
Abstract: |
It is often argued that the tax on continued work should be removed by
implementing actuarially fair schemes. However, these schemes cannot help fund
the expected Social Security deficit. This paper proposes to give individuals
only a fraction of the marginal actuarially fair incentives in case of
postponed retirement. Social Security then faces a tradeoff between giving
enough incentives to make individuals actually delay retirement and giving
little increase in pensions in order to help finance its expected deficit.
This trade-off is captured by a Laffer curve that we quantify on French data.
Furthermore, we analyze the interactions between wealth and retirement
behavior. |
Keywords: |
retirement behavior and wealth, actuarially fair benefits |
JEL: |
H31 H55 J26 |
Date: |
2005–02 |
URL: |
http://d.repec.org/n?u=RePEc:iza:izadps:dp1499&r=dge |