Labor Market Search and Optimal Retirement Policy |
| |
| Authors: | Joydeep Bhattacharya Casey B Mulligan Robert R Reed III |
| |
| Institution: | Bhattacharya:;Associate Professor of Economics, Department of Economics, Iowa State University, Ames, IA 50011. Phone 1–515–294–5886, Fax 1–515–294–0221, E-mail Mulligan:;Professor of Economics and Research Associate, University of Chicago and National Bureau of Economic Research, Department of Economics, University of Chicago, 1126 East 59th Street, Chicago, IL 60637. Phone 1–773–702–9017, Fax 1–773–702–8490, E-mail Reed:;Assistant Professor of Economics, Department of Economics, Gatton College of Business and Economics, University of Kentucky, Lexington, KY 40506. Phone 1–859–257–5975, Fax 1–859–323–1920, E-mail |
| |
| Abstract: | A popular and long‐standing view is that social security is a means for young, unemployed people to “purchase” jobs from older workers. Can social security, by encouraging retirement and hence creating job vacancies for the young, improve the allocation of workers to jobs? Maybe, according to a standard model of labor market search, but public retirement programs currently pay the elderly substantially more than their jobs are worth. An important effect is that retirement reduces the value of other vacant jobs. Our results imply that recent reforms aimed at reducing retirement incentives are likely to improve labor market efficiency. |
| |
| Keywords: | |
|
|
