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- Title
A note on "raising the mandatory retirement age and its effect on long‐run income and Pay As You Go (PAYG) pensions".
- Authors
Tanaka, Jumpei
- Abstract
Fanti (2014, Metroeconomica, 65, 619–645) showed that raising the mandatory retirement age always reduces capital accumulation and may lower per young income and pension benefit, under the assumption that old labor and young labor are perfect substitutes (or equivalently, the elasticity of substitution is infinite). We reexamine his analysis by assuming that the two labors are imperfect substitutes (the elasticity of substitution is finite), and prove that his results no longer hold when the elasticity of substitution is not sufficiently high.
- Subjects
CAPITAL; PENSIONS; MANDATORY retirement; ELASTICITY (Economics); SUBSTITUTION (Economics)
- Publication
Metroeconomica, 2019, Vol 70, Issue 1, p68
- ISSN
0026-1386
- Publication type
Article
- DOI
10.1111/meca.12227