It is often argued that implicit taxation on continued activity of elderly workers is responsible for the widely observed trend towards early retirement. In a world of laissez-faire or of first-best efficiency, there would be no such implicit taxation. The point of this paper is that when...

A means tested minimum income for old age creates in incentive for some not to save for old age and instead to free ride. Recent literature is undecided to what extent this inefficient savings distortion should be even worse. In a simple optimal taxation framework we show that it is Pareto...

Feldstein [1985] posed the questions of what would be the optimal level of retirement benefit, and what would be the optimal mix between the pay-as-you-go system and the funded pension system under the assumption of an exogenous interest rate. We reconsider the problem with the addition of a...