Pension reform and labor market incentives

Arbeitspapier

This paper investigates how parametric reform in a pay-as-you-go pension system with a tax benefit link affects retirement incentives and work incentives of prime-age workers. We find that postponed retirement tends to harm incentives of prime-age workers in the presence of a tax benefit link, thereby creating a policy trade-off in stimulating aggregate labor supply. We show how several popular reform scenarios are geared either towards young or old workers, or, indeed, both groups under appropriate conditions. We also provide a sharp characterization of the excess burden of pension insurance and show how it depends on the behavioral supply elasticities on the extensive and intensive margins and the effective tax rates implicit in contribution rates.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Reihe Ökonomie / Economics Series ; No. 208

Classification and Topics

• Classification: Wirtschaft ; Social Security and Public Pensions ; Retirement; Retirement Policies
• Subject: pension reform ; retirement ; hours worked ; tax benefit link ; actuarial adjustment ; excess burden ; Rentenreform ; Altersgrenze ; Arbeitsangebot ; Ökonomischer Anreiz ; Steuer ; Gesetzliche Rentenversicherung ; Excess Burden ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Fisher, Walter H. ; Keuschnigg, Christian
• Event: Veröffentlichung
• (who): Institute for Advanced Studies (IHS)
• (where): Vienna
• (when): 2007

Further information

• Handle: http://hdl.handle.net/10419/72725
• Last update: 10.03.2025, 11:45 AM CET