Retirement saving and development traps

This paper establishes the existence of multiple equilibria that help explain why some countries remain poor and diverge from the economic progress experienced by rich countries. Endogenous growth models cannot explain the negative correlation between work-lives and long-run growth rates. Extending growth models to explain this negative correlation leads to multiple equilibria; one with long work-lives and low rates of growth and another with short work-lives and high rates of growth.