A dismal future? Towards a new model of labor market dynamics based on evolving demographic variables

Poblete Cazenave, M. & Sanderson, W.C. (2015). A dismal future? Towards a new model of labor market dynamics based on evolving demographic variables. IIASA Interim Report. IIASA, Laxenburg, Austria: IR-15-017

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Project: Reassessing Ageing from a Population Perspective (RE-AGEING, FP7 323947)

Abstract

Standard labor market models assume that individuals work between ages 15-64 and then retire. Forecasted improvements in demographic variables such as life expectancy and health level of the population question the validity of those assumptions. Here we develop a model in which individuals decide optimally their retirement age according to changes in demographic and economic variables. Under this framework, individuals should naturally delay their retirement in the following decades. This implies a very different approach to policy, since the implied support ratios may not be as worrisome as the ones coming from the standard models. However, a word of caution is necessary, as the design of the pension system may give enough incentives for people to retire before what could be optimal on an equitable pension system.

Item Type: Monograph (IIASA Interim Report)
Research Programs: World Population (POP)
Young Scientists Summer Program (YSSP)
Depositing User: IIASA Import
Date Deposited: 15 Jan 2016 08:54
Last Modified: 27 Aug 2021 17:25
URI: https://pure.iiasa.ac.at/11672

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