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The timing of retirement — New evidence from Swiss female workers

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  • Hanel, Barbara
  • Riphahn, Regina T.

Abstract

We investigate the responsiveness of individual retirement decisions to changes in financial incentives. A reform increased women's normal retirement age (NRA) in two steps from age 62 to age 63 first and then to age 64. At the same time retirement at the previous NRA became possible at a benefit discount. Since the reform affected specific birth cohorts we can identify causal effects. We find strong and robust behavioral effects of changes in financial retirement incentives. A permanent reduction of retirement benefits by 3.4% induces a decline in the age-specific annual retirement probability by over 50%. The response to changes in financial retirement benefits varies with educational background: those with low education respond most strongly to an increase in the price of leisure.

Suggested Citation

  • Hanel, Barbara & Riphahn, Regina T., 2012. "The timing of retirement — New evidence from Swiss female workers," Labour Economics, Elsevier, vol. 19(5), pages 718-728.
  • Handle: RePEc:eee:labeco:v:19:y:2012:i:5:p:718-728
    DOI: 10.1016/j.labeco.2012.05.013
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    Cited by:

    1. Engels, Barbara & Geyer, Johannes & Haan, Peter, 2017. "Pension incentives and early retirement," Labour Economics, Elsevier, vol. 47(C), pages 216-231.
    2. Giesecke, Matthias Nicolas & Yang, Guanzhong, 2016. "The Effect of Financial Incentives on Retirement Decision Making under Different Schemes of Information Provision: Experimental Evidence," Annual Conference 2016 (Augsburg): Demographic Change 145548, Verein für Socialpolitik / German Economic Association.
    3. Welteke, Clara & Geyer, Johannes & Haan, Peter, 2016. "Early retirement eligibility and employment behavior: evidence from a cohort based pension reform," Annual Conference 2016 (Augsburg): Demographic Change 145783, Verein für Socialpolitik / German Economic Association.
    4. Umut Oguzoglu & Cain Polidano & Ha Vu, 2016. "Impacts from Delaying Access to Retirement Benefits on Welfare Receipt and Expenditure: Evidence from a Natural Experiment," Melbourne Institute Working Paper Series wp2016n20, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    5. Frank Erp & Niels Vermeer & Daniel Vuuren, 2014. "Non-financial Determinants of Retirement: A Literature Review," De Economist, Springer, vol. 162(2), pages 167-191, June.
    6. Konle-Seidl, Regina, 2017. "Retention and re-integration of older workers into the labour market: What works?," IAB Discussion Paper 201717, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    7. repec:cup:jpenef:v:17:y:2018:i:03:p:278-315_00 is not listed on IDEAS
    8. Cribb, Jonathan & Emmerson, Carl & Tetlow, Gemma, 2016. "Signals matter? Large retirement responses to limited financial incentives," Labour Economics, Elsevier, vol. 42(C), pages 203-212.
    9. Carlos Pérez & Ángel Martín-Román & Alfonso Moral, 2015. "The impact of leisure complementarity on the labour force participation of older males in Spain," Applied Economics Letters, Taylor & Francis Journals, vol. 22(3), pages 214-217, February.
    10. repec:wfo:wstudy:58803 is not listed on IDEAS
    11. Ashok Thomas & Luca Spataro, 2013. "Pension funds and Market Efficiency: A review," Discussion Papers 2013/164, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    12. repec:eee:hapoch:v1_457 is not listed on IDEAS
    13. Boman, Anders, 2015. "Spending time together? Effects on the retirement decision from partner’s labour market status," Working Papers in Economics 618, University of Gothenburg, Department of Economics.
    14. repec:wfo:wstudy:58532 is not listed on IDEAS
    15. Niels Vermeer, 2016. "Age Anchors and the Expected Retirement Age: An Experimental Study," De Economist, Springer, vol. 164(3), pages 255-279, September.
    16. Giesecke, Matthias & Yang, Guanzhong, 2018. "Are financial retirement incentives more effective if pension knowledge is high?," Journal of Pension Economics and Finance, Cambridge University Press, vol. 17(03), pages 278-315, July.
    17. Johannes Geyer & Clara Welteke, 2017. "Closing Routes to Retirement: How Do People Respond?," Discussion Papers of DIW Berlin 1653, DIW Berlin, German Institute for Economic Research.
    18. Daniel Vuuren, 2014. "Flexible Retirement," Journal of Economic Surveys, Wiley Blackwell, vol. 28(3), pages 573-593, July.
    19. Bergemann, Annette & Riphahn, Regina T., 2015. "Maternal Employment Effects of Paid Parental Leave," IZA Discussion Papers 9073, Institute for the Study of Labor (IZA).
    20. Börsch-Supan, Axel & Härtl, Klaus & Leite, Duarte & Ludwig, Alexander, 2018. "Endogenous retirement behavior of heterogeneous households under pension reforms," SAFE Working Paper Series 221, Research Center SAFE - Sustainable Architecture for Finance in Europe, Goethe University Frankfurt.
    21. Staubli, Stefan & Lalive, Rafael, 2016. "Ho to Delay Labor Market Exit and Pension Claiming?," Annual Conference 2016 (Augsburg): Demographic Change 145550, Verein für Socialpolitik / German Economic Association.
    22. Leinonen, Taina & Laaksonen, Mikko & Chandola, Tarani & Martikainen, Pekka, 2016. "Health as a predictor of early retirement before and after introduction of a flexible statutory pension age in Finland," Social Science & Medicine, Elsevier, vol. 158(C), pages 149-157.
    23. repec:wfo:wstudy:46905 is not listed on IDEAS

    More about this item

    Keywords

    Retirement insurance; Incentives; Social security; Labor force exit; Natural experiment;

    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • 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

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