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Pathways to early retirement in Denmark, 1984-2000

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Author Info

  • Mona Larsen
  • Peder J. Pedersen

Abstract

Purpose – The paper seeks to describe the multitude of pathways to early exit from the labour force and to estimate how individuals allocate into different pathways out of the labour force conditional on early retirement. Design/methodology/approach – A multinomial logit approach is used to analyse the characteristics of individuals who retire through each pathway compared to those remaining in the labour force. Findings – Eight pathways from work to an early retirement programme are identified. Overall, availability and/or generosity of retirement programmes are important for early retirement through the employment and unemployment insurance benefit dominated pathways, while personal characteristics seem to be at least as important for early retirement through other pathways. Research limitations/implications – An interesting approach in future work would be to gain access to health data, making it possible to build a competing risks model where some pathways are used due to health shocks and others are chosen based on economic optimisation comparing compensation rates with disutility from continued work. Originality/value – While the dominant approach in many retirement studies is on destinations, the analytical focus in this paper is instead on how people span the period from leaving the job until entry into an early retirement programme. The period the authors study contains a policy experiment, where a programme for early retirement conditional on age and unemployment is opened and closed down again later in the period.

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Bibliographic Info

Article provided by Emerald Group Publishing in its journal International Journal of Manpower.

Volume (Year): 29 (2008)
Issue (Month): 5 (September)
Pages: 384-409

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Handle: RePEc:eme:ijmpps:v:29:y:2008:i:5:p:384-409

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Related research

Keywords: Behaviour; Denmark; Labour market; Retirement; Social security;

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References

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  1. Mårten Palme & Ingemar Svensson, 2004. "Income Security Programs and Retirement in Sweden," NBER Chapters, in: Social Security Programs and Retirement around the World: Micro-Estimation, pages 579-642 National Bureau of Economic Research, Inc.
  2. Dahl, S.-A., Nilsen, O.A. & Vaage, K., 2000. "Work or Retirement? Exit Routes for Norwegian Elderly," Norway; Department of Economics, University of Bergen 213, Department of Economics, University of Bergen.
  3. Regina Riphahn, 1997. "Disability retirement and unemployment - substitute pathways for labour force exit? An empirical test for the case of Germany," Applied Economics, Taylor & Francis Journals, vol. 29(5), pages 551-561.
  4. Hernaes, Erik & Sollie, Marte & Strom, Steinar, 2000. " Early Retirement and Economic Incentives," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(3), pages 481-502, June.
  5. Dahl, Svenn-Åge & Nilsen, Øivind Anti & Vaage, Kjell, 2002. "Gender Differences in Early Retirement Behaviour," IZA Discussion Papers 522, Institute for the Study of Labor (IZA).
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Cited by:
  1. Euwals, Rob & van Vuren, Annemiek & van Vuuren, Daniel, 2011. "The Decline of Early Retirement Pathways in the Netherlands: An Empirical Analysis for the Health Care Sector," IZA Discussion Papers 5810, Institute for the Study of Labor (IZA).

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