Age-dependent taxation, retirement behavior, adn work hours over the life cycle
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Universidad de Granada. Departamento de Teoría e Historia Económica
Computable general equilibriumLabor supplyRetirementAge-dependent taxation
Díaz-Saavedra, J. Age-dependent taxation, retirement behavior, adn work hours over the life cycle. Universidad de Granada. Departamento de Teoría e Historia Económica (2013). (The Papers; 13/09). [http://hdl.handle.net/10481/31590]
PatrocinadorFinancial support from the Spanish Ministerio de Ciencia e Innovaci on (ECO2011-25737).
We use a computable overlapping generations model economy, which matches the stylized facts concerning retirement behavior, to analyze the consequences of three reforms designed to reduce tax rates on the labor supply of older workers. We nd that these reforms increase the participation rates of the elderly and show that the gains, in terms of old age work hours, are non-trivial. However, we also nd that the total labor supply response to the reforms is not so much an increase in total lifetime hours as it is a reallocation of hours over the life cycle. Finally, we show that these reforms, designed to increase the length of the working life of individuals, may not increase output.