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Mortality transition and differential incentives for early retirement

Author

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  • d'Albis, Hippolyte
  • Lau, Paul
  • Sanchez-Romero, Miguel

Abstract

Many studies specify human mortality patterns parametrically, with a parameter change affecting mortality rates at different ages simultaneously. Motivated by the stylized fact that a mortality decline affects primarily younger people in the early phase of mortality transition but mainly older people in the later phase, we study how a mortality change at an arbitrary age affects optimal retirement age. Using the Volterra derivative for a functional, we show that mortality reductions at older ages delay retirement unambiguously, but that mortality reductions at younger ages may lead to earlier retirement due to a substantial increase in the individual's expected lifetime human wealth.
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Suggested Citation

  • d'Albis, Hippolyte & Lau, Paul & Sanchez-Romero, Miguel, 2010. "Mortality transition and differential incentives for early retirement," LERNA Working Papers 10.21.327, LERNA, University of Toulouse.
    • Handle: RePEc:ler:wpaper:10.21.327
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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