IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/18752.html
   My bibliography  Save this paper

Social security and retirement across OECD countries

Author

Listed:
  • Alonso Ortiz, Jorge

Abstract

There are large differences in the employment to population ratio relative to the US across OECD countries, and these differences are even larger for the old age (55-69 years). There are also large differences in various features of social security, such as the replacement rate, the entitlement age or whether it is allowed to collect social security while working. These observations suggest that they might be an important contributing factor in accounting for differences in retirement. I assess quantitatively the importance of these features using a life cycle general equilibrium model of retirement. I find that the differences in social security account for 90% of the differences in employment to population ratio at ages 60-64 in the OECD. The differences in the replacement rates and whether the system allows for collecting social security while working are the most important contributing factors to account for the differences in retirement.

Suggested Citation

  • Alonso Ortiz, Jorge, 2009. "Social security and retirement across OECD countries," MPRA Paper 18752, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:18752
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/18752/1/MPRA_paper_18752.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Fatih Guvenen & Burhanettin Kuruscu & Serdar Ozkan, 2014. "Taxation of Human Capital and Wage Inequality: A Cross-Country Analysis," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 81(2), pages 818-850.
    2. Edward C. Prescott, 2004. "Why do Americans work so much more than Europeans?," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 28(Jul), pages 2-13.
    3. Vegard Skirbekk, 2004. "Age and Individual Productivity: A Literature Survey," Vienna Yearbook of Population Research, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna, vol. 2(1), pages 133-154.
    4. Edward C. Prescott & Richard Rogerson & Johanna Wallenius, 2009. "Lifetime Aggregate Labor Supply with Endogenous Workweek Length," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(1), pages 23-36, January.
    5. Rogerson, Richard & Wallenius, Johanna, 2009. "Micro and macro elasticities in a life cycle model with taxes," Journal of Economic Theory, Elsevier, vol. 144(6), pages 2277-2292, November.
    6. Bullard, James & Feigenbaum, James, 2007. "A leisurely reading of the life-cycle consumption data," Journal of Monetary Economics, Elsevier, vol. 54(8), pages 2305-2320, November.
    7. Richard Rogerson, 2007. "Taxation and market work: is Scandinavia an outlier?," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 32(1), pages 59-85, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bagchi, Shantanu, 2016. "Is The Social Security Crisis Really As Bad As We Think?," Macroeconomic Dynamics, Cambridge University Press, vol. 20(3), pages 737-776, April.
    2. Erosa, Andrés & Fuster, Luisa & Kambourov, Gueorgui, 2012. "Labor supply and government programs: A cross-country analysis," Journal of Monetary Economics, Elsevier, vol. 59(1), pages 84-107.
    3. Bagchi, Shantanu, 2015. "Labor supply and the optimality of Social Security," Journal of Economic Dynamics and Control, Elsevier, vol. 58(C), pages 167-185.
    4. Francisco Azpitarte, 2011. "Measurement and identification of asset-poor households: a cross-national comparison of Spain and the United Kingdom," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 9(1), pages 87-110, March.
    5. Daniel van Vuuren, 2011. "Flexible Retirement," CPB Discussion Paper 174, CPB Netherlands Bureau for Economic Policy Analysis.
    6. Emin Gahramanov & Xueli Tang, 2013. "Should We Refinance Unfunded Social Security?," Economica, London School of Economics and Political Science, vol. 80(319), pages 532-565, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alonso-Ortiz, Jorge, 2014. "Social security and retirement across the OECD," Journal of Economic Dynamics and Control, Elsevier, vol. 47(C), pages 300-316.
    2. Freddy Heylen & Renaat Van de Kerckhove, 2014. "Heterogeneous ability and the effects of fiscal policy on employment, income and welfare in general equilibrium," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 14/898, Ghent University, Faculty of Economics and Business Administration.
    3. Erosa, Andrés & Fuster, Luisa & Kambourov, Gueorgui, 2012. "Labor supply and government programs: A cross-country analysis," Journal of Monetary Economics, Elsevier, vol. 59(1), pages 84-107.
    4. Edward C. Prescott & Johanna Wallenius, 2012. "Aggregate labor supply," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 35(Oct).
    5. Langot, François & Pizzo, Alessandra, 2019. "Accounting for labor gaps," European Economic Review, Elsevier, vol. 118(C), pages 312-347.
    6. Heylen, Freddy & Van de Kerckhove, Renaat, 2019. "Getting low educated and older people into work: The role of fiscal policy," Journal of Policy Modeling, Elsevier, vol. 41(4), pages 586-606.
    7. Heylen Freddy & Van de Kerckhove Renaat, 2013. "Employment by age, education, and economic growth: effects of fiscal policy composition in general equilibrium," The B.E. Journal of Macroeconomics, De Gruyter, vol. 13(1), pages 49-103, October.
    8. Janiak, Alexandre & Santos Monteiro, Paulo, 2016. "Towards a quantitative theory of automatic stabilizers: The role of demographics," Journal of Monetary Economics, Elsevier, vol. 78(C), pages 35-49.
    9. Brecht Boone & Freddy Heylen, 2019. "Cross‐Country Differences in Unemployment: Fiscal Policy, Unions, and Household Preferences in General Equilibrium," Scandinavian Journal of Economics, Wiley Blackwell, vol. 121(3), pages 1270-1302, July.
    10. Wallenius, Johanna, 2013. "Social security and cross-country differences in hours: A general equilibrium analysis," Journal of Economic Dynamics and Control, Elsevier, vol. 37(12), pages 2466-2482.
    11. Robert Shimer, 2009. "Convergence in Macroeconomics: The Labor Wedge," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(1), pages 280-297, January.
    12. Jäntti, Markus & Pirttilä, Jukka & Selin, Håkan, 2015. "Estimating labour supply elasticities based on cross-country micro data: A bridge between micro and macro estimates?," Journal of Public Economics, Elsevier, vol. 127(C), pages 87-99.
    13. Lopez-Daneri, Martin, 2016. "NIT picking: The macroeconomic effects of a Negative Income Tax," Journal of Economic Dynamics and Control, Elsevier, vol. 68(C), pages 1-16.
    14. Brendan Epstein & Miles S. Kimball, 2014. "The Decline of Drudgery and the Paradox of Hard Work," International Finance Discussion Papers 1106, Board of Governors of the Federal Reserve System (U.S.).
    15. Bagchi, Shantanu, 2015. "Labor supply and the optimality of Social Security," Journal of Economic Dynamics and Control, Elsevier, vol. 58(C), pages 167-185.
    16. 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.
    17. repec:adr:anecst:y:2009:i:95-96:p:06 is not listed on IDEAS
    18. repec:spo:wpmain:info:hdl:2441/45smbs6p8180bqfu6epmve62q2 is not listed on IDEAS
    19. Fang, Lei & Yang, Fang, 2022. "Consumption and hours in the United States and Europe," Journal of Economic Dynamics and Control, Elsevier, vol. 144(C).
    20. Batyra, Anna & de la Croix, David & Pierrard, Olivier & Sneessens, Henri R., 2013. "Declining bargaining power of workers and the rise of early retirement in Europe," GIAM Working Papers 13-6, Galatasaray University Economic Research Center.
    21. 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.
    22. Alessandra Casarico & Alessandro Sommacal, 2012. "Labor Income Taxation, Human Capital, and Growth: The Role of Childcare," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(4), pages 1182-1207, December.

    More about this item

    Keywords

    Social security; retirement; idiosyncratic labor income risk;
    All these keywords.

    JEL classification:

    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:18752. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.