Seminar

Career Length:Effects of Curvature of Earnings Profiles, Earnings Shocks, Taxes, and Social Security

Lars Ljungqvist (Stockholm School of Business)

June 6, 2011, 17:00–18:30

Toulouse

Room Amphi S

Political Economy Seminar

Abstract

The same high labor supply elasticity that characterizes a representative family model with indivisible labor and employment lotteries can also emerge without lotteries when self-insuring individuals choose career lengths. Off corners, the more elastic the earnings profile is to accumulated working time, the longer is a worker’s career. Negative (positive) unanticipated earnings shocks reduce (increase) the career length of a worker holding positive assets at the time of the shock, while the effects are the opposite for a worker with negative assets. By inducing a worker to retire at an official retirement age, government provided social security can attenuate responses of career lengths to earnings profile slopes, earnings shocks, and taxes.

Reference

Lars Ljungqvist (Stockholm School of Business), Career Length:Effects of Curvature of Earnings Profiles, Earnings Shocks, Taxes, and Social Security, Political Economy Seminar, Toulouse: TSE, June 6, 2011, 17:00–18:30, room Amphi S.