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Aging and the interaction between education, retirement and the working life

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  • Dirk-jan Omtzigt

Abstract

Population aging and the burden it imposes on state finances is one of the major economic challenges governments around the world face. Responses are formulated in terms of either increasing employment (for example by raising the retirement age) or increasing productivity (investment in education). This paper brings together these two responses in a unified framework and shows how the individual`s education and retirement decisions are affected by population aging - caused either by a fall in the population growth rate, or an increase in life expectancy - and the budget balancing mechanism of the public pension systems. We discuss how a budget balancing mechanism can be informed by fairness considerations and we show that early retirement can be the result of the application of Musgrave`s rule in response to a fall in fertility.

Suggested Citation

  • Dirk-jan Omtzigt, 2006. "Aging and the interaction between education, retirement and the working life," Economics Series Working Papers 274, University of Oxford, Department of Economics.
    • Handle: RePEc:oxf:wpaper:274
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    References listed on IDEAS

    as
    1. Rother, P.C. & Catenaro, M. & Schwab, G., 2003. "Ageing and pensions in the Euro Area Survey and projection results," Social Protection Discussion Papers and Notes 25986, The World Bank.
    2. Eytan Sheshinski, 2002. "Optimum Delayed Retirement Credit," Discussion Paper Series dp329, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.
    3. Rodrigo Soares, 2006. "The effect of longevity on schooling and fertility: evidence from the Brazilian Demographic and Health Survey," Journal of Population Economics, Springer;European Society for Population Economics, vol. 19(1), pages 71-97, February.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Aging; Fairness; Education; Retirement;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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