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Forward-Looking Labor Supply Responses to Changes in Pension Wealth: Evidence from Germany

Author

Listed:
  • Artmann, Elisabeth

    (Institute for Employment Research (IAB), Nuremberg)

  • Fuchs-Schündeln, Nicola

    (Goethe University Frankfurt)

  • Giupponi, Giulia

    (Bocconi University)

Abstract

We provide new evidence of forward-looking labor supply responses to changes in pension wealth. We exploit a 2014 German reform that increased pension wealth for mothers by an average of 4.4% per child born before January 1, 1992. Using administrative data on the universe of working histories, we implement a difference-in-differences design comparing women who had their first child before versus after January 1, 1992. We document significant reductions in labor earnings, driven by intensive margin responses. Our estimates imply that, on average, an extra euro of pension wealth in a given period reduces unconditional labor earnings by 54 cents.

Suggested Citation

  • Artmann, Elisabeth & Fuchs-Schündeln, Nicola & Giupponi, Giulia, 2023. "Forward-Looking Labor Supply Responses to Changes in Pension Wealth: Evidence from Germany," IZA Discussion Papers 16132, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp16132
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    References listed on IDEAS

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    More about this item

    Keywords

    labor supply; social security; pension wealth;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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