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Does raising the early retirement age increase employment of older workers?


Staubli, Stefan; Zweimüller, Josef (2013). Does raising the early retirement age increase employment of older workers? Journal of Public Economics, 108:17-32.

Abstract

Two pension reforms in Austria increased the early retirement age (ERA) from 60 to 62 for men and from 55 to 58.25 for women. We find that raising the ERA increased employment by 9.75 percentage points among affected men and by 11 percentage points among affected women. The reforms had large spillover effects on the unemployment insurance program but negligible effects on disability insurance claims. Specifically, unemployment increased by 12.5 percentage points among men and by 11.8 percentage points among women. The employment response was largest among high-­‐‑wage and healthy workers, while low-­‐‑wage and less healthy workers either continued to retire early via disability benefits or bridged the gap to the ERA via unemployment benefits. Taking spillover effects and additional tax revenues into account, we find that for a typical birthyear cohort a one year increase in the ERA resulted in a reduction of net government expenditures of 107 million euros for men and of 122 million euros for women.

Abstract

Two pension reforms in Austria increased the early retirement age (ERA) from 60 to 62 for men and from 55 to 58.25 for women. We find that raising the ERA increased employment by 9.75 percentage points among affected men and by 11 percentage points among affected women. The reforms had large spillover effects on the unemployment insurance program but negligible effects on disability insurance claims. Specifically, unemployment increased by 12.5 percentage points among men and by 11.8 percentage points among women. The employment response was largest among high-­‐‑wage and healthy workers, while low-­‐‑wage and less healthy workers either continued to retire early via disability benefits or bridged the gap to the ERA via unemployment benefits. Taking spillover effects and additional tax revenues into account, we find that for a typical birthyear cohort a one year increase in the ERA resulted in a reduction of net government expenditures of 107 million euros for men and of 122 million euros for women.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
Scopus Subject Areas:Social Sciences & Humanities > Finance
Social Sciences & Humanities > Economics and Econometrics
Uncontrolled Keywords:Retirement age, disability, labor supply, policy reform, unemployment
Language:English
Date:2013
Deposited On:24 Jan 2014 14:03
Last Modified:30 Jul 2020 12:07
Publisher:Elsevier
ISSN:0047-2727
Additional Information:See also ECON Working Paper No. 20 (https://www.zora.uzh.ch/51524/)
OA Status:Green
Free access at:PubMed ID. An embargo period may apply.
Publisher DOI:https://doi.org/10.1016/j.jpubeco.2013.09.003
PubMed ID:24319299

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