Are we doing enough to discourage early retirement?
AbstractIncreasing the effective retirement age contributes to the sustainability of pension systems. However, oftentimes policies aiming at rising employment rates of older workers fall short in delaying retirement. This seems to be the case with retirement age flexibility reforms in Portugal. We analyze the recent Portuguese history of incentives to retire. For 1990-2006 we find that individuals faced very high implicit taxes on working with the result that half the workers had already left the labour force before age 65. We then look at the Social Security reforms in 2007 and find that the incentives to continue working became even smaller than they already were. We conclude that increasing the labour supply of older workers in a system with flexible retirement age needs policies with more aggressive use of penalties and bonuses than what decision makers were willing to accept.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Toulouse School of Economics (TSE) in its series TSE Working Papers with number 11-220.
Date of creation: Jan 2011
Date of revision:
Early retirement; Pensions; Social Security;
This paper has been announced in the following NEP Reports:
- NEP-AGE-2011-11-28 (Economics of Ageing)
- NEP-ALL-2011-11-28 (All new papers)
- NEP-LAB-2011-11-28 (Labour Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Fischer, Justina AV & Sousa-Poza, Alfonso, 2009.
"The Effect of Pension Generosity on Early Retirement: A Microdata Analysis for Europe from 1967 to 2004,"
15940, University Library of Munich, Germany.
- Justina A. V. Fischer & Alfonso Sousa-Poza, 2009. "The Effect of Pension Generosity on Early Retirement: A Microdata Analysis for Europe from 1967 to 2004," Diskussionspapiere aus dem Institut fÃ¼r Volkswirtschaftslehre der UniversitÃ¤t Hohenheim 311/2009, Department of Economics, University of Hohenheim, Germany.
- Romain Duval, 2003. "The Retirement Effects of Old-Age Pension and Early Retirement Schemes in OECD Countries," OECD Economics Department Working Papers 370, OECD Publishing.
- Paula Albuquerque & Manuela Arcanjo & Vítor Escária, 2009. "Early Retirement in Portugal," Working Papers Department of Economics 2009/39, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
- Edward Whitehouse & Anna D'Addio & Rafal Chomik & Andrew Reilly, 2009. "Two Decades of Pension Reform: What has been Achieved and What Remains to be Done?," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan, vol. 34(4), pages 515-535, October.
- Robert Fenge & Pierre Pestieau, 2005. "Social Security and Early Retirement," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262062496, December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.