Friday, August 13, 2010

Krugman on the Retirement Age Debate

Paul Krugman weighs in on the issue of raising the retirement age. He's against it, mainly because of disparities in the life expectancy of rich and poor:

Finally, disparities in life expectancy have been rising sharply, with much smaller gains for disadvantaged socioeconomic groups and/or those with less education than the average. Yet these are precisely the people who depend most on Social Security.

5 comments:

Anonymous said...

Except he's talking about proposals, in the US, to raise it from 65 to 67, not to raise it from 60 to 62... And I would think that the structure of the retirement system being different has an influence as well.

Mr Punch said...

I also wonder to what extent the divergence in life expectancy applies to France, where access to health care depends less on income.

Anonymous said...

I learned that, in fact, the regular retirement age in France IS 65, like in the US. However, people who are 60 and have paid their social security dues for 41 years are allowed to retire, albeit with a penalty. Like in the US, many people decide to retire as soon as they can, in spite of the penalty. The actual retirement age is quite similar in both countries: 61.7 in France, 62 in the US.


In France, life expectancy shows a 7 years difference between working class jobs and upper-middle class and upper-class jobs.

MYOS

Anonymous said...

No, the retirement age for most people in France is 60. However, the mean retirement age is around 62 (or 61.7 as you say) because of the need to have 41 years of service. So you can get full retirement benefits at age 62 with those 41 years, wheras in the US, you get a reduced pension to take into account three more years of benefits.

And I strongly contest that it's the jobs that change the life expectancy; it's the social status of people, which, while related to income, is not only due to that.

Anonymous said...

I don't understand how, if most people retire at age 60 (and we saw that some retire at 55 like bullet train engineers), the mean retirement age can be roughly 62.
I understood that you don't get your full pension till age 65, because of a system called "decote"?

How does social status, rather than the actual job, affect health and life expectency?
A job is not just income, it's also the type of work you do: until recently, factory work in the Detroit big 3 meant a good salary, pension, etc, but the physical hardships were the same as non-union, temp work in the same factory now (well, what's left of the same factory). Or, being a journalist, say for the Post Gazette or the Local Daily Times, usually doesn't pay that well but I assume health risks are pretty limited.
I don't know what the situation is in terms of physical hardship and life expectency for service-sector and retail, like waitressing or frying burgers for BK. I do know that US cashiers usually have to help clients while standing, while French cashiers tend to sit on high chairs and don't have to lift heavy loads, yet it seems like a stressful job nevertheless, even with the chair and health care benefits.