Optimal Transition Schedules for Retirement Age Increases: Welfare and Intergenerational Fairness
By Yaodi Yong, Jinggong Zhang & Xiaobai Zhu In response to demographic shifts such as declining fertility rates and increasing life expectancy, many countries are raising the full retirement age (FRA). This paper develops a novel optimization framework for designing FRA increase schedules, explicitly balancing the minimization of aggregate welfare loss across affected generations with intergenerational fairness considerations. Within a continuous-time framework, we model welfare loss through disutility functions applied to actuarial losses generated by pension reforms, while incorporating smoothness...
