We show how the age profile of earnings, retirement rules and retirement behavior are tightly linked through the general equilibrium of the economy. Generous Social Security benefits financed by large Social Security taxes discourage human capital accumulation. In Social Security systems where...

We analyze a collective defined contribution pension fund which aims at intergenerational risk sharing among different age cohorts using a return smoothing mechanism. Using a utility based framework, we find that approximately one third of unexpected return shocks should be directly passed on to...

Using a model of a two-pillar pension system, designed after and calibrated to the Dutch situation, we explore for the funding ratio of pension funds and the welfare of individuals the implications of replacing nominal debt in the pension fund's portfolio with indexed debt. We consider...

We develop a model where individuals differ in productivity and in longevity. Benefits from the public pay-as-you-go pension system take the form of a collective annuity, with both a contributive (Bismarckian) component (based on the worker's past earnings) and a flat (Beveridgean) part. Voters...

Recent reforms that aim at reducing the upcoming burdens of population ageing might seriously harm low income individuals. An increase in old-age poverty and disability will be the result. Under this prospect, the present paper quantitatively characterizes the optimal progressivity of unfunded...

In 2007 Germany has introduced a pension reform which increases the normal retirement age from currently age 65 to 67. The present study aims to quantify the macroeconomic, welfare and efficiency consequences of this reform by means of a computable general equilibrium model with overlapping...

It is common practice for public pension schemes to offer individuals the option to delay benefit claiming until after the normal retirement age and adjust the annual benefit level as a result. This adjustment is often not actuarially neutral with respect to the age at which benefits are...

This paper explores the effect of letting individuals choose their retirement age in a world of uncertainty where there exist both defined benefit (DB) and defined contribution (DC) pension plans. The paper shows that giving individuals the flexibility to determine when to retire is an important...

Using a stochastic general equilibrium model with overlapping generations, this paper studies (i) the effects on both extensive and intensive labour supply responses to changes in fertility rates, and (ii) the potential of a retirement reform to mitigate the effects of fertility changes on...

The present paper studies the growth and efficiency consequences of pension funding with individual retirement accounts in a general equilibrium overlapping generations model with idiosyncratic lifespan and labor income uncertainty. We distinguish between economies with rational and hyperbolic...