Statutory Retirement Age and Lifelong Learning
41 Pages Posted: 15 May 2008 Last revised: 19 Jan 2009
Date Written: January 16, 2009
As societies age, pension reforms become a central issue. One proposition is to extend worklife. However, due to the endogenous depreciation of human capital in many countries the effective retirement age is even below the present statutory retirement age. We analyze this effect in a putty-putty human capital vintage model where the economic retirement age is endogenous. While a higher rate of technical progress will shorten working life, effects of international competition and outsourcing are determined by the terms of trade. As education is expected to solve the problem of too rapidly depreciating human capital we introduce a two stage education system with initial schooling and lifelong learning. However, not even lifelong learning is able to align the economic with the statutory retirement.
Keywords: lifelong learning, retirement, unemployment, education system
JEL Classification: J26, O33, J64
Suggested Citation: Suggested Citation