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Abdoulaye NDIAYE (NYU Stern and Chicago Fed.) “Flexible Retirement and Optimal Taxation”

May 6, 12:15 pm

Time: 12:15pm – 13:30 pm
Date: 06th of May 2019
Place: Room 3001

Abdoulaye NDIAYE (NYU Stern and Chicago Fed.) “Flexible Retirement and Optimal Taxation”

Abstract : This paper studies optimal insurance against private idiosyncratic shocks in a life-cycle model with intensive labor supply and endogenous retirement. In this environment, the optimal labor tax is hump-shaped in age: insurance benefits of taxation push for increasing-in-age taxes while rising labor supply elasticities and optimal late retirement of highly productive workers push for lowering taxes for old workers. In calibrated numerical simulations, the optimum achieves sizable welfare gains that age-dependent taxes do not deliver under the status quo US Social Security. Nevertheless, an optimal combination of age-dependent linear taxes with increasing-in-age retirement benefits generates welfare gains close to optimal.

Details

Date:
May 6
Time:
12:15 pm
Event Categories:
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Organizers

Edouard CHALLE
Julien PRAT