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- Title
FAIR RETIREMENT UNDER RISKY LIFETIME*.
- Authors
Fleurbaey, Marc; Leroux, Marie‐Louise; Pestieau, Pierre; Ponthiere, Gregory
- Abstract
A premature death unexpectedly brings a life and a career to their end, leading to substantial welfare losses. We study the retirement decision in an economy with risky lifetime and compare the laissez-faire with egalitarian social optima. We consider two social objectives: (1) the maximin on expected lifetime welfare, allowing for a compensation for unequal life expectancies, and (2) the maximin on realized lifetime welfare, allowing for a compensation for unequal lifetimes. The latter optimum involves, in general, decreasing lifetime consumption profiles as well as raising the retirement age. This result is robust to the introduction of unequal life expectancies and unequal productivities.
- Subjects
EARLY death; RETIREMENT &; economics; LIFE expectancy; PENSIONS; EQUALITY &; economics
- Publication
International Economic Review, 2016, Vol 57, Issue 1, p177
- ISSN
0020-6598
- Publication type
Article
- DOI
10.1111/iere.12152