Dynamic decision making in social security system

Abstract

This paper studies the decision behavior of workers and characteristics of retirement age in social security system. Based on overlapping-generation model and Markov decision process, this paper constructs a dynamic decision model for social security system. In this model, workers choose their optimal retirement age taking into account the current social security system. In addition, this paper analyzes the equilibrium results. In the end, experiment simulation shows that social security system has some effects on the retirement behavior of workers.