Pensions for an Aging Population

Diamond, Peter A.

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Pensions for an Aging Population

NBER Working Paper No. w11877

32 Pages Posted: 3 Apr 2006 Last revised: 16 Dec 2022

See all articles by Peter A. Diamond

Peter A. Diamond

Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute)

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Date Written: December 2005

Abstract

After presenting the Gruber-Wise analysis showing a strong effect on retirement of implicit taxes from pension rules, it is shown that there is no effect of these implicit taxes on unemployment. This supports the argument for avoiding high implicit taxes on continued work. Also discussed are methods for adjusting benefits and taxes for increases in life expectancy, with particular attention to increasing "the retirement age." Calculations are presented showing the decreases in benefits for an increase in the normal retirement age in the US and the years of service for a full benefit in France.

Suggested Citation: Suggested Citation

Diamond, Peter A., Pensions for an Aging Population (December 2005). NBER Working Paper No. w11877, Available at SSRN: https://ssrn.com/abstract=875728