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Early retirement for mothers in Greece

Ioannis A. Kaskarelis
Kyriaki D. Tsilika
Organization: University of Thessaly
Department: Department of Economics
Journal / Anthology

International Journal of Social Economics
Year: 2009
Volume: 36
Issue: 5
Page range: 566-579

Purpose – Greek social security system has a provision, under which women who have children are entitled to exit the labour force and claim pension benefits after completing 20 years of work and at a fully productive age. The critical issue arising from this regime is that it seems that mothers are rewarded for their nature of being able to give birth to children, which is unfair for the rest of working people. This paper aims to address these issues. Design/methodology/approach – The reward of maternity should be given at the proper time, i.e. by subsidizing mothers to stay at home and breeding their children. For this purpose we set up a cost-benefit analysis in an overlapping generation model in order to compare the present provision with an alternative, under which mothers are subsidized and abstain from the labour market for 15 years. However, this policy could be applied to either gender. Findings – In the model we develop (as alternative) we show that this kind of provision, under certain parameters’ values could be to the benefit of the social security system in pure financial terms, beyond the other positive qualitative externalities for the society. Practical/implications – This alternative policy could be proved more efficient in financial and economic terms for the social security system, but it could also influence family programming and increase birth rate. Originality/value – The most valuable result is that children breeding and the occupation of one parent with this task are not deterministically inefficient, or waste of resources, for the economy and the social security system, as many economists (and other social scientists) insist. And on the other hand, breeding of children by their parents is precious for the society since it strengthens family and, through that, social bonds.

*Business and Economics > Economics

Social security, Greece, Maternity benefits, Cost benefit analysis