Political election on legal retirement age

In the context of the current debate surrounding the reform of pension systems, this paper analyzes the political economy of the legal retirement age. Using a life-cycle model in which individuals differ by age and by wage, we analyze the outcome of a majority voting process on the legal retirement age in a Pay-As-You-Go pension system. The results show that the older an individual is, the closer her optimal retirement age is to the status quo age. That is, the status quo retirement age acts as a magnet. Additionally, we find that the preferred legal retirement age of most of the working population increases when the pension system is more redistributive. We also observe a positive relationship between the preferred legal retirement age and the status quo age.