Mortality transition and differential incentives for early retirement
D'Albis, Hippolyte; Lau, Paul S.; Sanchez-Romero, Miguel (2012), Mortality transition and differential incentives for early retirement, Journal of Economic Theory, 147, 1, p. 261-283. http://dx.doi.org/10.1016/j.jet.2011.11.004
TypeArticle accepté pour publication ou publié
Journal nameJournal of Economic Theory
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Abstract (EN)Many studies specify human mortality patterns parametrically, with a parameter change affecting mortality rates at different ages simultaneously. Motivated by the stylized fact that a mortality decline affects primarily younger people in the early phase of mortalitytransition but mainly older people in the later phase, we study how a mortality change at an arbitrary age affects optimal retirement age. Using the Volterra derivative for a functional, we show that mortality reductions at older ages delay retirement unambiguously, but that mortality reductions at younger ages may lead to earlierretirement due to a substantial increase in the individualʼs expected lifetime human wealth.
Subjects / Keywordsincentive for early retirement; lifetime human wealth effect; years-to-consume effect; mortality decline
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