Delaying the normal and early retirement ages in Spain: behavioural and welfare consequences for employed and unemployed workers

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• dc.contributor.author Sánchez, Alfonso R.ca
• dc.contributor.author García-Pérez, José Ignacioca
• dc.contributor.author Jiménez-Martín, Sergica
• dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa
• dc.date.accessioned 2017-07-26T10:50:48Z
• dc.date.available 2017-07-26T10:50:48Z
• dc.date.issued 2014-05-01
• dc.date.modified 2017-07-23T02:16:11Z
• dc.description.abstract In this paper, we explore the links between pension reform, early retirement, and the use of unemployment as an alternative pathway to retirement. We use a dynamic rational expectations model to analyze the search and retirement behaviour of employed and unemployed workers aged 50 or over. The model is calibrated to reproduce the main reemployment and retirement patterns observed between 2002 and 2008 in Spain. It is subsequently used to analyze the effects of the 2011 pension reform in Spain, characterized by two-year delays in both the early and the normal retirement ages. We find that this reform generates large increases in labour supply and sizable cuts in pension costs, but these are achieved at the expense of very large welfare losses, especially among unemployed workers. As an alternative, we propose leaving the early retirement age unchanged, but penalizing the minimum pension (reducing its generosity in parallel to the cuts imposed on individual pension benefits, and making it more actuarially fair with age). This alternative reform strikes a better balance between individual welfare and labour supply stimulus.
• dc.format.mimetype application/pdfca
• dc.identifier https://econ-papers.upf.edu/ca/paper.php?id=1422
• dc.identifier.uri http://hdl.handle.net/10230/22568
• dc.language.iso eng
• dc.relation.ispartofseries Economics and Business Working Papers Series; 1422
• dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
• dc.rights.accessRights info:eu-repo/semantics/openAccess
• dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
• dc.subject.keyword early retirement
• dc.subject.keyword job search
• dc.subject.keyword 2011 pension reform
• dc.subject.keyword Labour, Public, Development and Health Economics
• dc.subject.keyword Statistics, Econometrics and Quantitative Methods
• dc.title Delaying the normal and early retirement ages in Spain: behavioural and welfare consequences for employed and unemployed workersca
• dc.type info:eu-repo/semantics/workingPaper