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Does Raising the Retirement Age Increase Employment of Older Workers?

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  • Staubli, Stefan
  • Zweimüller, Josef

Abstract

This paper studies how an increase in the minimum retirement age affects the labor market behavior of older workers. Between 2000 and 2006 the Austrian government gradually increased the early retirement age from 60 to 62.2 for men and from 55 to 57.2 for women. Using administrative data on the universe of Austrian private-sector employees, the results from the empirical analysis suggest that this policy change reduced retirement by 19 percentage points among affected men and by 25 percentage points among affected women. The decline in retirement was accompanied by a sizeable increase in employment of 7 percentage points among men and 10 percentage points among women, but had also a important spillover effects into the unemployment insurance program. Specifically, the unemployment rate increased by 10 percentage points among men and 11 percentage points among women. In contrast, the policy change had only a small impact on the share of individuals claiming disability or partial retirement benefits.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8510.

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Date of creation: Aug 2011
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Handle: RePEc:cpr:ceprdp:8510

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Keywords: early retirement; labor supply; policy reform; retirement age;

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References

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  1. Manoli, Dayanand & Weber, Andrea, 2010. "Intertemporal Substitution in Labor Force Participation: Evidence from Policy Discontinuities," IZA Discussion Papers 5248, Institute for the Study of Labor (IZA).
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Citations

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Cited by:
  1. Fouarge D. & Grip A. de & Montizaan R.M., 2013. "How sensitive are individual retirement expectations to raising the retirement age?," ROA Research Memorandum 006, Maastricht University, Research Centre for Education and the Labour Market (ROA).
  2. Inderbitzin, Lukas & Staubli, Stefan & Zweimüller, Josef, 2013. "Extended Unemployment Benefits and Early Retirement: Program Complementarity and Program Substitution," Economics Working Paper Series 1323, University of St. Gallen, School of Economics and Political Science.
  3. Vestad, Ola Lotherington, 2013. "Labour supply effects of early retirement provision," Labour Economics, Elsevier, vol. 25(C), pages 98-109.
  4. Sánchez-Romero, Miguel & Sambt, Jože & Prskawetz, Alexia, 2012. "Quantifying the role of alternative pension reforms on the Austrian economy," ECON WPS - Vienna University of Technology Working Papers in Economic Theory and Policy 04/2012, Vienna University of Technology, Institute for Mathematical Methods in Economics, Research Group Economics (ECON).
  5. Jonathan Cribb & Carl Emmerson & Gemma Tetlow, 2013. "Incentives, shocks or signals: labour supply effects of increasing the female state pension age in the UK," IFS Working Papers W13/03, Institute for Fiscal Studies.
  6. Eichhorst, Werner & Boeri, Tito & Braga, Michela & De Coen, An & Galasso, Vincenzo & Gerard, Maarten & Kendzia, Michael J. & Mayrhuber, Christine & Pedersen, Jakob Louis & Schmidl, Ricarda & Steiber, , 2013. "Report No. 53: Combining the Entry of Young People in the Labour Market with the Retention of Older Workers," IZA Research Reports 53, Institute for the Study of Labor (IZA).
  7. Tibor Hanappi, 2012. "Retirement Behaviour in Austria: Incentive Effects on Old-Age Labor Supply," NRN working papers 2012-13, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.

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