Labor Market Regulation and Retirement Age

Abstract

The present paper analyzes the determinants of political consensus on relevant aspects of the Social Security System and focus on the choices over employment protection and retirement age; a theoretical model is build where an equilibrium setup results from a political process involving three social groups: young, low and high productivity old. Hypothesis and results of the model are tested using macro data. The aim of the analysis is to provide some insight on the reasons why some institutional setups are supported by voters and implemented while others don’t.