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Social Insurance and Retirement: A Cross-Country Perspective

Author

Listed:
  • Tobias Laun

    (Uppsala University)

  • Johanna Wallenius

    (Stockholm School of Economics)

Abstract

We study the role of old-age pensions, disability insurance and healthcare in accounting for the differing labor supply patterns of older individuals across countries. We develop a life cycle model of labor supply and health with heterogeneous agents. In our framework, people choose when to stop working and when/if to apply for disability and pension benefits. We find that the incentives faced by older workers differ hugely across countries. In fact, based solely on differences in social insurance programs, the model predicts even more cross-country variation in the employment rates of people aged 55-69 than we observe in the data. (Copyright: Elsevier)

Suggested Citation

  • Tobias Laun & Johanna Wallenius, 2016. "Social Insurance and Retirement: A Cross-Country Perspective," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 22, pages 72-92, October.
    • Handle: RePEc:red:issued:14-161
    DOI: 10.1016/j.red.2016.06.004
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    Citations

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    Cited by:

    1. Dominik Sachs & Sebastian Findeisen, 2016. "Optimal Financial Aid Policies for Students," 2016 Meeting Papers 1421, Society for Economic Dynamics.
    2. Wallenius, Johanna, 2022. "R(a)ising employment of older individuals," The Journal of the Economics of Ageing, Elsevier, vol. 23(C).
    3. Tobias Laun, 2020. "Optimal Social Insurance with Endogenous Health," Scandinavian Journal of Economics, Wiley Blackwell, vol. 122(2), pages 464-493, April.
    4. Mark Colas & Sebastian Findeisen & Dominik Sachs, 2021. "Optimal Need-Based Financial Aid," Journal of Political Economy, University of Chicago Press, vol. 129(2), pages 492-533.
    5. Philip Sauré & Arthur Seibold & Elizaveta Smorodenkova & Hosny Zoabi, 2023. "Occupations Shape Retirement across Countries," CESifo Working Paper Series 10365, CESifo.
    6. Feng, Zhigang & Zhao, Kai, 2018. "Employment-based health insurance and aggregate labor supply," Journal of Economic Behavior & Organization, Elsevier, vol. 154(C), pages 156-174.
    7. Jochem de Bresser & Raquel Fonseca & Pierre-Carl Michaud, 2016. "Retirement Behavior in the U.S. and Europe," Cahiers de recherche 1609, Chaire de recherche Industrielle Alliance sur les enjeux économiques des changements démographiques.
    8. Yu, Zhixiu, 2024. "Why are older men working more? The role of social security," Journal of Public Economics, Elsevier, vol. 231(C).
    9. Manuel Ventura-Marco & Carlos Vidal-Meliá, 2016. "Integrating retirement and permanent disability in NDC pension schemes," Applied Economics, Taylor & Francis Journals, vol. 48(12), pages 1081-1102, March.
    10. Laun, Tobias & Markussen, Simen & Vigtel, Trond Christian & Wallenius, Johanna, 2019. "Health, longevity and retirement reform," Journal of Economic Dynamics and Control, Elsevier, vol. 103(C), pages 123-157.
    11. Fang, Lei & Yang, Fang, 2022. "Consumption and hours in the United States and Europe," Journal of Economic Dynamics and Control, Elsevier, vol. 144(C).
    12. Fu Zhiming & Wu Liang & Zhuang Ziguan, 2019. "Labor supply, income distribution, and tax progressivity in a search model," The B.E. Journal of Macroeconomics, De Gruyter, vol. 19(1), pages 1-18, January.
    13. Laun, Tobias & Markussen, Simen & Vigtel, Trond Christian & Wallenius, Johanna, 2018. "Health, Longevity and Pension Reform," Working Paper Series 2018:9, Uppsala University, Department of Economics.
    14. Christian vom Lehn & Eric Fisher & Aspen Gorry, 2018. "Male Labor Supply and Generational Fiscal Policy," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 28, pages 121-149, April.
    15. Findeisen, Sebastian & Sachs, Dominik, 2015. "Designing efficient college and tax policies," Working Papers 15-09, University of Mannheim, Department of Economics.
    16. Zhixiu Yu, 2021. "Why Are Older Men Working More? The Role of Social Security," Working Papers 2021-041, Human Capital and Economic Opportunity Working Group.
    17. Lei Fang & Fang Yang, 2021. "Consumption and Hours between the United States and France," FRB Atlanta Working Paper 2021-7, Federal Reserve Bank of Atlanta.
    18. Li, Yue, 2018. "Paradoxical effects of increasing the normal retirement age: A prospective evaluation," European Economic Review, Elsevier, vol. 101(C), pages 512-527.
    19. Chek. M. Z. A & Ismail. I., 2023. "Retirement Planning Issues, Problems, and Opportunities in Malaysia," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(9), pages 1926-1932, September.
    20. Masayuki Okada, 2023. "The optimal earnings test and retirement behavior," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 30(4), pages 1036-1068, August.

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    More about this item

    Keywords

    Life cycle; Retirement; Disability insurance; Health;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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