Cycle de vie, emploi et retraite Jean-Olivier HAIRAULT, Professeur à Paris I Panthéon-Sorbonne et à lEcole dEconomie de Paris (EEP)

The life-cycle decisions Retirement Education Working life When employed: hours, wage bargaining and search on the job When unemployed: job search Saving and consumption participation

Two stylized facts

Fact 1

Fact 2

Fact 2 : Focusing on older workers

years old 54 %13% 37% Financial costs European Target : 50% Sweden : 78% G-B : 67% Germany: 56% Sweden : 57% G-B : 40% Germany : 21% Why? To increase the retirement age

Fact 2: Focusing on older workers

Lhorizon dactivité se raccourcit avec lâge La perspective de la retraite décourage tout «investissement » des et dans les seniors Pour un chômeur proche de la retraite : à quoi bon chercher un emploi ? Pour une entreprise : à quoi bon former ou embaucher un travailleur proche de la retraite ? Entrée Vie active Age Retraite Impact négatif de la date butoir sur lemploi de la génération la plus proche de la retraite Baisse du taux demploi à proximité de lâge de la retraite dans tous les pays = 60 ans France 50 Ce nest pas lâge absolu qui compte mais la distance à la retraite 65 ans OCDE

Oecd data on labor force: international comparisons: employment rate and unemployment rate by age: 15-19; 20-24; 25-29; 30-50; 50-54; 55-59; 60-64; 65-70; Time series and cross-country. French Labor Force Survey: Enquête Emploi; employment and unemployment rate by age; transitions employment- unemployment by age

Part I :Retirement and Social Security System Chapter 1. SS Efficiency: Funded versus PAYG system A. optimal accumulation B. Uncertainty (idiosyncratic/global) and risk sharing (intra/intergenerational) C. SS System and Inequality Chapter 2. Topics A. Role of intergenerational altruism B. Time-inconsistent choices C. Political economy

Chapter 3. Retirement age decision A. Principles and the role of productivity, health and death B. The SS neutrality and the tax on continued activity C. A laffer curve view

Part 2: Life-cycle Employment Chapter 4. Older worker Experiences A. International comparisons B. French specificities Chapter 5. Job destructions and Job creations over the life cycle A. A positive theory B. Age-Employment Policies C. Explaining transatlantic differences

Chapter 6: Retirement and Job search interactions A. A joint decision B. Delaying retirement age: a double dividend

Les seniors et l'emploi en France, Conseil d'Analyse Economique, Les seniors et l'emploi en France COR Reports OECD reports on older worker employment Limpact du vieillissement démographique sur les mécanismes macroéconomiques, Antoine d'Autume Artus P. et F. Legros (1999) Le choix du système de retraite, Economica. Charpin J.-M. (1999) Lavenir de nos retraites, Rapport au Premier ministre, La Documentation Française

Social Security and optimal capital accumulation « National Debt in a Neoclassical Growth Model », Peter Diamond, AER Dec The Social Insurance Paradox, Henry Aaron, The Canadian, Journal of Economics and Political Science, Assessing Dynamic Efficiency: Theory and Evidence, Andrew Abel et al., REStud, Jan 1989.

Uncertainty, borrowing constraints On the Role of Social Security as a Means for Efficient Risk Sharing in an Economy where Human Capital is not Tradable, Robert Merton, chpt. in Zvi Bodie et al., Financial Aspects of the U.S. Pensions Systems, Intergenerational Risk-Sharing and Risk-Taking of a Pension Fund, Gollier, C., Journal of Public Economics (December, 2007), The Risk-Sharing Implications of Alternative Social Security Arrangements, Storesletten, K., C. I. Telmer and A. Yaron, Carnegie-Rochester Conference Series on Public Policy 50 (June 1999),

Uncertainty, borrowing constraints Krueger, D. and F. Kubler, Pareto-Improving Social Security Reform When Financial Markets are Incomplete!? American Economic Review, June, Dirk Krueger & Felix Kubler, "Intergenerational Risk- Sharing via Social Security when Financial Markets Are Incomplete," American Economic Review, American Economic Association, vol. 92(2), pages , May.Intergenerational Risk- Sharing via Social Security when Financial Markets Are IncompleteAmerican Economic Review Conesa, J. and D. Krueger, Social Security Reform with Heterogeneous Agents, Review of Economic Dynamics 2 (October 1999),

Inequality and Social Security On the Distributional Effects of Social Security Reform, Huggett, M. and G. Ventura, Review of Economic Dynamics (July 1999), Inequality and Social Security Reforms, Journal of Economic Dynamics and Control, (J.O Hairault and F. Langot), Le caractère plus égalitaire de la retraite par répartition: une cause entendue? (joint with F. Langot), in Revue d'Economie Politique, 2002, vol. 112, p

The role of altruism De Nardi, M., Wealth Inequality and Intergenerational Links, Review of Economic Studies 71 (July 2004), Luisa Fuster, "Is Altruism Important for Understanding the Long-Run Effects of Social Security?," Review of Economic Dynamics.Is Altruism Important for Understanding the Long-Run Effects of Social Security? Review of Economic Dynamics A Welfare Analysis of Social Security in a Dynastic Framework, (Luisa Fuster, Ayse İmrohoroğlu and Selahattin İmrohoroğlu), International Economic Review, Vol. 44, No. 4, November Elimination of Social Security in a Dynastic Framework, (Luisa Fuster, Ayse İmrohoroğlu and Selahattin İmrohoroğlu), Review of Economic Studies. forthcomingElimination of Social Security in a Dynastic Framework

The role of mandatory savings Time Inconsistent Preferences and Social Security, (Ayse İmrohoroğlu, Selahattin İmrohoroğlu and Douglas Joines), Quarterly Journal of Economics, Volume 118, issue 2, May 2003 Are You Sure Youre Saving Enough for Retirement? Journal of Economic Perspectives, 21(3) Summer 2007: What Accounts for the Variation in Retirement Saving Across U.S. Households? (with B. D. Bernheim and S. Weinberg), American Economic Review 91(4) (September 2001):

Political economy "The political economy of social security: a survey," European Journal of Political Economy, Galasso, Vincenzo & Profeta, Paola, Elsevier, vol. 18(1), pages 1-29, March.The political economy of social security: a survey European Journal of Political Economy Boldrin, M and A. Rustichini (2000), Political Equilibria with Social Security," Review of Economic Dynamics, 3, Cooley, T. and J. Soares (1997), A Positive Theory of Social Security Based on Reputation," Journal of Political Economy, 107, Will social security boom survive the baby, Thomas F. Cooley and Jorge Soares, Carnegie-Rochester Conference Series on Public Policy 45 (1996).

Transition from a Paygo to a Funded Retirement System

Retirement Age Economics of retirement, Alan L. Gustman and Thomas L. Steinmeier Ageing and retirement age. What can we learn from the Overlapping Generations Model ? Antoine d'Autume Blanchet D. and L. Caussat (2000), Le libre choix de lâge de la retraite, approche économique, in Retraites choisies et progressives, D. Taddei ed., Rapport du Conseil dAnalyse Economique, La Documentation française

Social Security (non-)neutrality Gruber, J. and D.Wise, Social Security and Retirement: An International Comparison, American Economic Review 88 (May 1998),

The laffer curve on the continued activity tax Inciter à différer le départ en retraite: une analyse en termes de courbe de Laffer (joint with F. Langot and T. Sopraseuth), in Revue d'Economie Politique, 2005, 115, p Quantifying the Laffer Curve on the Continued Activity Tax in a Dynastic Framework. International Economic Review, (J.O. Hairault, F. Langot and T. Sopraseuth), Forthcoming. Quantifying the Laffer Curve on the Continued Activity Tax in a Dynastic Framework

Life Cycle Employment Heckman, James J, "Life Cycle Consumption and Labor Supply: An Explanation of the Relationship Between Income and Consumption Over the Life Cycle," American Economic Review, American Economic Association, vol. 64(1), pages , MarchLife Cycle Consumption and Labor Supply: An Explanation of the Relationship Between Income and Consumption Over the Life CycleAmerican Economic Review Life-cycle equilibrium unemployment, A. Chéron, J.O. Hairault and F. Langot. Les effets à rebours de l'âge de la retraite sur le taux d'emploi des seniors, (joint with F. Langot and T. Sopraseuth), in Economie et Statistique, 2007.

Retirement and job search interactions The Pre-Retirement Job Search: A Basic Explanation of the Older Worker Employment. J.O. Hairault, F. Langot and T. Sopraseuth