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Title: Mortality transition and differential incentives for early retirement

Citation Type: Miscellaneous

Publication Year: 2010

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Abstract: Existing studies investigating the effect of mortality decline on retirement age usuallyspecify the human mortality pattern in a parametric way and consider the derivative ofoptimal retirement age with respect to a change in the survival parameter. However, asurvival parameter change affects the mortality rates at different ages simultaneously.Motivated by the stylized fact that mortality decline affects primarily younger people inthe early phase of a mortality transition but mainly older people in the later phase, westudy the more fundamental question of how a mortality change at an arbitrary age affectsoptimal retirement age. By using the Volterra derivative for a functional, we show that amortality decline at an older age unambiguously leads to a later retirement age, but amortality decline at a younger age may lead to earlier retirement because of thesubstantial increase in the individual's expected lifetime human wealth.

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Authors: Lau, S.P.; Sanchez-Romero, Miguel; D'Albis, Hippolyte

Publisher: University of Hong Kong

Data Collections: IPUMS USA

Topics: Aging and Retirement

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