Mortality transition and differential incentives for early retirement

Abstract : 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 mortality transition 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 earlier retirement due to a substantial increase in the individual's expected lifetime human wealth.
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Hippolyte d'Albis, Paul Lau Sau-Him, Miguel Sanchez-Romero. Mortality transition and differential incentives for early retirement. Journal of Economic Theory, Elsevier, 2012, 147 (1), pp.261-283. ⟨10.1016/j.jet.2011.11.004⟩. ⟨hal-00659868⟩

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