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The Boomerang of Female40: seniority pensions in Hungary, 2011–2018

Author

Listed:
  • Andras Simonovits

    (Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences also Mathematical Institute of Budapest University of Technology)

Abstract

In 2011, the Hungarian government introduced seniority pensions (Female40): females, who have been accumulating at least 40 years of eligibility (related to the length of contributions), can retire at any age without actuarial benefit reduction. The elimination of other early retirement scheme in 2012 and slowly rising real wages made the program even more popular: the lifetime benefit was maximized at the earliest retirement. Since 2016, real wages have been growing rather fast; making delay attractive. Without being recognized, Female40 has become a boomerang: immediate retirement from 2014 causes loss rather than gain to the retiree of Female40.

Suggested Citation

  • Andras Simonovits, 2018. "The Boomerang of Female40: seniority pensions in Hungary, 2011–2018," CERS-IE WORKING PAPERS 1832, Institute of Economics, Centre for Economic and Regional Studies.
    • Handle: RePEc:has:discpr:1832
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    References listed on IDEAS

    as
    1. Jonathan Gruber & David A. Wise, 2004. "Social Security Programs and Retirement around the World: Micro-Estimation," NBER Books, National Bureau of Economic Research, Inc, number grub04-1, March.
    2. Erik Granseth & Wolfgang Keck & Wolfgang Nagl & András Simonovits & Melinda Tir, 2019. "Negative correlation between retirement age and length of contribution?," Oxford Economic Papers, Oxford University Press, vol. 71(4), pages 1050-1070.
    3. Erik Granseth & Wolfgang Keck & Wolfgang Nagl & Melinda Tir & Andras Simonovits, 2016. "Negative correlation between retirement age and contribution length?," CERS-IE WORKING PAPERS 1633, Institute of Economics, Centre for Economic and Regional Studies.
    4. Gary Burtless, 1986. "Social Security, Unanticipated Benefit Increases, and the Timing of Retirement," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 53(5), pages 781-805.
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    More about this item

    Keywords

    public pension; early retirement; seniority pensions; optimal retirement age;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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