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Retirement, Early Retirement, and Disability: Explaining Labor Force Participation after Fifty-Five in France

In: Social Security Programs and Retirement Around the World: Disability Insurance Programs and Retirement

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  • Luc Behaghel
  • Didier Blanchet
  • Muriel Roger

Abstract

We analyze the influence of health and financial incentives on the retirement behavior of older workers in France, building upon the Stock and Wise (1990) option value approach. The model accounts for three main retirement routes: normal retirement, disability insurance (DI), and unemployment/preretirement pathways, and is estimated with a combination of microeconomic datasets that include the French data of the European SHARE survey. The estimates confirm that a decrease in the generosity of the pension and DI schemes induces people to stay longer in the labor market, and that people with better health tend to retire later. We present extreme situations simulating what an individual's retirement behavior would have been if only one retirement route had existed and in the absence of constraints on work capabilities. We show that average years of work between 55 and 64 are nearly 14% greater when regular retirement incentives are applied to the whole population than when it is DI rules that are systematically applied.
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Suggested Citation

  • Luc Behaghel & Didier Blanchet & Muriel Roger, 2014. "Retirement, Early Retirement, and Disability: Explaining Labor Force Participation after Fifty-Five in France," NBER Chapters, in: Social Security Programs and Retirement Around the World: Disability Insurance Programs and Retirement, pages 251-284, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberch:13327
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    References listed on IDEAS

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    1. Luc Behaghel & Didier Blanchet & Thierry Debrand & Muriel Roger, 2012. "Disability and Social Security Reforms: The French Case," NBER Chapters, in: Social Security Programs and Retirement around the World: Historical Trends in Mortality and Health, Employment, and Disability Insurance Participatio, pages 301-326, National Bureau of Economic Research, Inc.
    2. James H. Stock & David A. Wise, 1990. "The Pension Inducement to Retire: An Option Value Analysis," NBER Chapters, in: Issues in the Economics of Aging, pages 205-230, National Bureau of Economic Research, Inc.
    3. Poterba, James M. & Venti, Steven F. & Wise, David A., 2017. "The asset cost of poor health," The Journal of the Economics of Ageing, Elsevier, vol. 9(C), pages 172-184.
    4. Courtney Coile & Kevin S. Milligan & David A. Wise, 2014. "Social Security Programs and Retirement Around the World: Disability Insurance Programs and Retirement - Introduction and Summary," NBER Working Papers 20120, National Bureau of Economic Research, Inc.
    5. David A. Wise, 2012. "Social Security Programs and Retirement around the World: Historical Trends in Mortality and Health, Employment, and Disability Insurance Participation and Reforms," NBER Books, National Bureau of Economic Research, Inc, number wise11-1, August.
    6. Thomas Barnay & François Jeger, 2006. "Quels dispositifs de cessation d’activité pour les personnes en mauvaise santé ?," Post-Print hal-01298924, HAL.
    7. David A. Wise, 1990. "Issues in the Economics of Aging," NBER Books, National Bureau of Economic Research, Inc, number wise90-1, August.
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    Citations

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    Cited by:

    1. Kadija Charni, 2016. "The French Pension Reforms and their Impact on Unemployed Older Workers," AMSE Working Papers 1602, Aix-Marseille School of Economics, France, revised Jan 2016.
    2. Constantin ANGHELACHE & Madalina-Gabriela ANGHEL & Mirela PANAIT, 2017. "Main Developments and Perspectives of the European Union," Romanian Statistical Review, Romanian Statistical Review, vol. 65(2), pages 57-79, June.
    3. Stancanelli, Elena G. F., 2016. "Couples' Retirement under Individual Pension Design: A Regression Discontinuity Study for France," IZA Discussion Papers 10322, Institute of Labor Economics (IZA).
    4. Didier Blanchet & Antoine Bozio & Corinne Prost & Muriel Roger, 2018. "Explaining the Reversal in the Trend of Older Workers’ Employment Rates: The Case of France," NBER Chapters, in: Social Security Programs and Retirement around the World: Working Longer, pages 87-115, National Bureau of Economic Research, Inc.
    5. Simon Rabaté & Julie Rochut, 2017. "Employment and Substitution Effects of Raising the Statutory Eligibility Age in France," Working Papers halshs-01622346, HAL.
    6. Etienne Lalé, 2018. "Turbulence and the employment experience of older workers," Quantitative Economics, Econometric Society, vol. 9(2), pages 735-784, July.
    7. Dan CRUCERU & Dumitru MARIN & Constantin ANGHELACHE & Madalina-Gabriela ANGHEL, 2017. "Analysis Of Labor Force Developments In The European Union And Its Cost," Romanian Statistical Review Supplement, Romanian Statistical Review, vol. 65(5), pages 198-210, May.
    8. Hélène Blake & Clémentine Garrouste, 2017. "Collateral effects of a pension reform in France," Working Papers hal-01500683, HAL.

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    More about this item

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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