Use and misuse of unemployment benefits for early retirement
Unemployment insurance (UI) in some countries is one of the most widely used routes to early retirement. Accordingly, firms lay off elderly workers whose wages exceed their productivity. These workers then receive unemployment benefits until they enter formal retirement, even though they have effectively already exited the labor market. To persuade them into finding the deal acceptable, they quite often may also receive some additional compensation from their employers. In this paper we consider three routes of transition from work to formal retirement that rely on UI: (i) standard unemployment compensation, (ii) public early retirement program yielding benefits higher than the unemployment compensation and (iii) unemployment compensation along with an income supplement provided by the former employer. The study examines under which conditions these three alternative practices can occur.
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- Jonathan Gruber & David A. Wise, 1999. "Social Security and Retirement around the World," NBER Books, National Bureau of Economic Research, Inc, number grub99-1, July.
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CESifo Working Paper Series
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- CREMER, Helmuth & LOZACHMEUR, Jean-Marie & PESTIEAU, Pierre, . "Social security, retirement age and optimal income taxation," CORE Discussion Papers RP 1722, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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"Financial Incentives in Disability Insurance in the Netherlands,"
Springer, vol. 155(1), pages 73-98, March.
- Annemiek van Vuren & Daniel van Vuuren, 2005. "Financial incentives in disability insurance in the Netherlands," CPB Discussion Paper 45, CPB Netherlands Bureau for Economic Policy Analysis.
- repec:fda:fdaddt:2003-03 is not listed on IDEAS
- Lazear, Edward P, 1979. "Why Is There Mandatory Retirement?," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1261-84, December.
- Jonathan Gruber & David A. Wise, 1999. "Introduction to "Social Security and Retirement around the World"," NBER Chapters, in: Social Security and Retirement around the World, pages 1-35 National Bureau of Economic Research, Inc.
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