Can Technological Change Sustain Retirement in an Aging Population?

A model of the governmental control of age at retirement uses population age structures, productivity, employment, and money income. The sustainability criterion is a sufficient level of individual money income for all ages. The decision variables are the variable age at retirement and the intensity of technological change. The model is calibrated on real data from the U.S. Census Bureau and Bureau of Labor Statistics between 1950 and 2005 and uses official U.S. population projections for 2006-2050. The main result is that the extrapolation of current U.S. technological trends can compensate negative demographic trends in the United States without increasing the age at retirement.