Longevity, retirement, and capital accumulation in a recursive model with an application to mandatory retirement

Zhang, Jie and Zhang, Junsen (2009) Longevity, retirement, and capital accumulation in a recursive model with an application to mandatory retirement. Macroeconomic Dynamics, 13 3: 327-348. doi:10.1017/S1365100508080073


Author Zhang, Jie
Zhang, Junsen
Title Longevity, retirement, and capital accumulation in a recursive model with an application to mandatory retirement
Journal name Macroeconomic Dynamics   Check publisher's open access policy
ISSN 1365-1005
1469-8056
Publication date 2009-06-01
Sub-type Article (original research)
DOI 10.1017/S1365100508080073
Open Access Status
Volume 13
Issue 3
Start page 327
End page 348
Total pages 22
Place of publication Cambridge, U.K.
Publisher Cambridge University Press
Language eng
Subject 2002 Economics and Econometrics
Abstract This paper explores how retirement timing, together with life-cycle saving and human capital investment in children, responds to rising longevity in a recursive model with altruistic agents. We find that rising longevity raises the retirement age. If initial life expectancy is not too high, rising longevity also raises human capital investment in children and the saving rate. Through these channels, rising longevity can be conducive to long-run economic growth. A binding mandatory retirement age reduces human capital investment and the growth rate, raises the saving rate, and reduces welfare.
Formatted abstract
This paper explores how retirement timing, together with life-cycle saving and human capital investment in children, responds to rising longevity in a recursive model with altruistic agents. We find that rising longevity raises the retirement age. If initial life expectancy is not too high, rising longevity also raises human capital investment in children and the saving rate. Through these channels, rising longevity can be conducive to long-run economic growth. A binding mandatory retirement age reduces human capital investment and the growth rate, raises the saving rate, and reduces welfare.
Keyword Longevity
Social-security
Growth
Life-cycle saving
Retirement
Q-Index Code C1
Q-Index Status Provisional Code
Institutional Status UQ

Document type: Journal Article
Sub-type: Article (original research)
Collection: School of Economics Publications
 
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Created: Thu, 03 Sep 2009, 17:59:14 EST by Mr Andrew Martlew on behalf of ___Unknown Unit