Jorgensen, Ole HagenJensen, Svend E. Hougaard2012-03-192012-03-192010-07-01https://hdl.handle.net/10986/3867Using a stochastic general equilibrium model with overlapping generations, this paper studies a policy rule for the retirement age aiming at offsetting the effects on the supply of labor following fertility changes. The authors find that the retirement age should increase more than proportionally to the direct fall in labor supply caused by a fall in fertility. The robustness of this result is checked against alternative model specifications and parameter values. The efficacy of the policy rule depends crucially on the link between the preference for leisure and the response of the intensive margin of labor supply to changes in the statutory retirement age. The model has subsequently been calibrated for Brazil by Jorgensen (2010), in the context of the Brazil Aging Study.CC BY 3.0 IGOAGGREGATE INCOMEALLOCATION OF RESOURCESBABIESBABYBABY BOOMBUSINESS CYCLECAPITAL INVESTMENTCHANGES IN FERTILITYCONSUMPTION INCREASESCONTRIBUTION RATEDEBTDECLINE IN FERTILITYDECLINES IN FERTILITYDEMOGRAPHIC TRENDSDEPENDENCY RATIODEPENDENCY RATIOSDISCOUNT RATEDOWNWARD PRESSUREEARLY RETIREMENTECONOMIC DECISIONSECONOMIC GROWTHECONOMIC IMPLICATIONSECONOMIC THEORYELASTICITYELASTICITY OF SUBSTITUTIONELDERLYENDOGENOUS VARIABLESEXOGENOUS SHOCKEXOGENOUS VARIABLEFERTILITYFERTILITY DECLINEFERTILITY RATEFERTILITY RATESFUTURE RESEARCHGENERAL EQUILIBRIUMGROSS RETURNGROWTH RATEHUMAN CAPITALIMPERFECT COMPETITIONINDEXATIONINNOVATIONSLABOR ECONOMICSLABOR FORCELABOR FORCESLABOR SUPPLYLABOURLONGEVITY ADJUSTMENTLOW FERTILITYLOWER FERTILITYMARKET EQUILIBRIUMNUMBER OF CHILDRENNUMBER OF WORKERSOPPORTUNITY COSTOPTIMIZATIONOVERLAPPING GENERATIONS MODELPAYROLL TAXPENSIONPENSION CONTRIBUTIONPENSION CONTRIBUTIONSPENSION SYSTEMPENSION SYSTEMSPOLICY FRAMEWORKPOLICY MAKERSPOLICY RESEARCHPOLICY RESEARCH WORKING PAPERPOLICY RESPONSEPOLITICAL ECONOMYPOPULATION DYNAMICSPOPULATION GROWTHPOPULATION GROWTH RATEPRODUCTIVITYPROGRESSRATE OF GROWTHREAL WAGESREPLACEMENT RATERESPECTRETIREESRETIREMENTRETIREMENT AGERETIREMENT PERIODRETIREMENT PERIODSRETIREMENT POLICYSOCIAL SECURITYSOCIAL SECURITY REFORMTAX RATETAXATIONUTILITY FUNCTIONWAGE RATEWEALTHWORKERWORKERSWORKING HOURSWorld Bank10.1596/1813-9450-5382