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Raising, scrapping retirement age 'has social, political costs'

It can help boost labour supply, but also increase inequality: Expert

Published on Jan 25, 2014 7:58 AM
 
As Singapore considers raising or scrapping its retirement age to cope with an ageing society, a Swiss scholar has warned that policymakers should consider the social and political consequences of such moves. -- BT FILE PHOTO: YEN MENG JIIN

As Singapore considers raising or scrapping its retirement age to cope with an ageing society, a Swiss scholar has warned that policymakers should consider the social and political consequences of such moves.

Raising the age may help increase labour supply, and does not necessarily increase unemployment or take jobs away from younger workers, said ageing issues expert Monika Butler at a talk here on Thursday.

But it may increase inequality between the rich and the poor, said the economist from Switzerland's University of St Gallen.

For one thing, the rich can more likely afford early retirement and live longer.

 
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Background story

She noted that for individuals, early retirement may lead to poorer health if they stay idle all day; for society, a smooth transition into retirement helps the economy even if people nearing retirement do just light work.