Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/20798 
Year of Publication: 
2005
Series/Report no.: 
IZA Discussion Papers No. 1499
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
It is often argued that the tax on continued work should be removed by implementing actuarially fair schemes. However, these schemes cannot help fund the expected Social Security deficit. This paper proposes to give individuals only a fraction of the marginal actuarially fair incentives in case of postponed retirement. Social Security then faces a tradeoff between giving enough incentives to make individuals actually delay retirement and giving little increase in pensions in order to help finance its expected deficit. This trade-off is captured by a Laffer curve that we quantify on French data. Furthermore, we analyze the interactions between wealth and retirement behavior.
Subjects: 
retirement behavior and wealth
actuarially fair benefits
JEL: 
J26
H55
H31
Document Type: 
Working Paper

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