the normative estimator of the probability of early retirement based on utility maps. This indicator takes into account the tradeoff between consumption and leisure as well as the heterogeneity of preferences of individuals. We then used the indicator to assess the incentives problems in Morocco, a fairly representative country for the middle-income group. We showed that incentives for early retirement are important, particularly in the national scheme. Using a model that projects the labor force by age, gender, and skills level we also showed that changes in labor force participation rates resulting from pension policies that affect retirement decisions can have important effects on human capital accumulation. Potentially, _on average, in the period 2006-2040, corrected early retirement incentives could increase the human capital growth rate by approximately 2 percent under conceivable stylized scenarios._ We find this impact quite significant in light of current pension reform discussion/decision-making practices that fail to quantify this broader economic implication.

Subsequently, we conducted an analysis based on micro simulations of career paths for individuals with different levels of education working in different economic sectors – and therefore belonging to different pension plans. We focused on three indicators: internal rates of return on education, net gains from queuing for jobs in the public sector, and the change in wealth resulting from switching jobs across sectors. When applied to Morocco the indicators showed that _a fragmented pension system distorts rates of return on education, reduces incentives to supply labor in the private sector, and discourages mobility between the public and private sectors._ The corollary is that pension reforms that unify the pension system can contribute to facilitating labor mobility across sectors and therefore to facilitating economic restructuring and improved efficiency.

There are both methodological and policy conclusions from our paper. Regarding the methodology, we believe that future assessments of pension institutions and international comparisons of the effects of benefit formulas and eligibility conditions on retirement decisions could benefit from the calculation of the normative estimator of the probability of early retirement based on the utility maps. The indicator is useful to assess, ex-ante, the potential impact that policy changes can have on retirement decisions. In addition, we believe that a complex analysis of the consequences of early retirement go beyond the narrow assessment of the impact on the financial sustainability of the pension scheme, it should even go beyond assessing the consolidated fiscal impact and it should address the impact of early retirement on the evolution of human capital. The methodology described in this paper using the gender, age and educational attainment specific projection of the labor force and the associated measure of human capital is a suitable framework for the analysis of how early retirement affects the evolution of productive capacities in the economy.

Regarding policies, the paper strengthens the argument for the existence of significant economic benefits of reforms that reduce incentives for early retirement, and eliminate differences in benefit formulas and eligibility conditions for different segments of the labor force. While those benefits have been pointed out in the literature, there are still a significant number of policy-makers in high- and middle-income countries that consider them exaggerated, especially when compared to the political costs of introducing pension 23