Immigration and Retirement Age

Boubtane, Ekrame

Immigration and Retirement Age - 2010.


28

We examine the link between the low-skilled immigration and the retirement decision. Using an overlapping-generations model with heterogeneous agents and endogenous labor supply, we analyze the effects of changes in the immigrant quota on the preferred retirement age in the presence of a Pay-as-you-go ( payg) social security system. We show that the decision to retire dependent on migration via the effect the latter has on the wage and on retirement pension. The crucial element is that the arrival of immigrants brings higher labor income to skilled seniors who may extend their working life and retire later when the pension system is more redistributive. Classification JEL: H55, J26, J61

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