Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/323720 
Year of Publication: 
2025
Citation: 
[Journal:] Journal of Public Economic Theory [ISSN:] 1467-9779 [Volume:] 27 [Issue:] 3 [Article No.:] e70034 [Publisher:] Wiley [Place:] Hoboken, NJ [Year:] 2025
Publisher: 
Wiley, Hoboken, NJ
Abstract: 
This paper examines the normative criteria for setting the statutory retirement age (SRA) under majority voting. It finds that when the working population forms the democratic majority, the SRA tends to be set inefficiently low. This inefficiency stems from a positive fiscal externality in pay‐as‐you‐go pension systems: workers determining the SRA do not consider the benefits that a higher retirement age provides to current pensioners. Using a continuous‐time overlapping generations model, the paper demonstrates that a Pareto improvement can be achieved by raising the SRA–provided it is accompanied by compensatory transfers from pensioners to workers at the time of the increase.
Subjects: 
majority voting
pareto improvement
retirement age
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

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