Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/197661 
Year of Publication: 
2018
Series/Report no.: 
Working Paper No. 2018:9
Publisher: 
Uppsala University, Department of Economics, Uppsala
Abstract: 
In this paper, we study alternative pension reforms designed to achieve fiscal sustainability in the face of demographic change. We are particularly interested in the heterogeneous effects across demographic groups, as improvements in health and longevity have not been uniform across the population. To this end, we develop a dynamic, structural life cycle model of heterogeneous agents who face health, mortality and income risk. We consider the following policy reform measures: (1) increasing the early access age to pensions, (2) raising income taxes, (3) lowering pension benefits and (4) lowering pension and disability benefits. We find that, of the considered policies, proportionally lowering pension and disability benefits results in the highest average welfare and the lowest degree of inequality. It is also successful at boosting employment, particularly among the less educated.
Subjects: 
Life cycle
Retirement
Disability insurance
Health
JEL: 
E24
J22
J26
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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