IDEAS home Printed from https://ideas.repec.org/a/ipf/psejou/v45y2021i2p257-282.html

Revisiting the effect of statutory pension ages on participation and the average age of retirement in OECD countries

Author

Listed:
  • David Turner

    (OECD Economics Department, Paris, France)

  • Hermes Morgavi

    (OECD Economics Department, Paris, France)

Abstract

Cross-country estimation work consistently finds that coefficients on statutory pension ages are positive and highly statistically significant in explaining labour force participation at older ages. However, the estimated effects are surprisingly modest when translated into the implied effect on the average effective age of retirement, which typically only increases by about 2 months for every year by which the statutory retirement age increases. This paper shows that grouping countries with similar pension systems, allowing for time heterogeneity and introducing other modelling choices, can improve the estimates of the effect of changes to the pension system. In countries in which there are alternative early retirement pathways or voluntary private pension systems, the effect of changes in statutory retirement ages tends to be dampened. However, for other countries, the effect of changes in statutory pension ages can be around two to three times larger than the typical finding from pooled country estimations.

Suggested Citation

  • David Turner & Hermes Morgavi, 2021. "Revisiting the effect of statutory pension ages on participation and the average age of retirement in OECD countries," Public Sector Economics, Institute of Public Finance, vol. 45(2), pages 257-282.
    • Handle: RePEc:ipf:psejou:v:45:y:2021:i:2:p:257-282
    DOI: 10.3326/pse.45.2.4
    as

    Download full text from publisher

    File URL: http://www.pse-journal.hr/upload/files/pse/2021/2/4.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.3326/pse.45.2.4?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Axel H. Börsch-Supan & Courtney Coile, 2018. "Social Security Programs and Retirement Around the World: Reforms and Retirement Incentives – Introduction and Summary," NBER Working Papers 25280, National Bureau of Economic Research, Inc.
    2. Sveinbjörn Blöndal & Stefano Scarpetta, 1999. "The Retirement Decision in OECD Countries," OECD Economics Department Working Papers 202, OECD Publishing.
    3. Balázs Égert & Peter Gal, 2017. "The quantification of structural reforms in OECD countries: A new framework," OECD Journal: Economic Studies, OECD Publishing, vol. 2016(1), pages 91-108.
    4. David A. Wise, 2012. "Social Security Programs and Retirement around the World: Historical Trends in Mortality and Health, Employment, and Disability Insurance Participation and Reforms," NBER Books, National Bureau of Economic Research, Inc, number wise11-1, May.
    5. Peter Gal & Adam Theising, 2015. "The macroeconomic impact of structural policies on labour market outcomes in OECD countries: A reassessment," OECD Economics Department Working Papers 1271, OECD Publishing.
    6. Christian Geppert & Yvan Guillemette & Hermes Morgavi & David Turner, 2019. "Labour supply of older people in advanced economies: the impact of changes to statutory retirement ages," OECD Economics Department Working Papers 1554, OECD Publishing.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lastauskas, Povilas & Stakėnas, Julius, 2020. "Labor market reforms and the monetary policy environment," European Economic Review, Elsevier, vol. 128(C).
    2. Mr. Francesco Grigoli & Zsoka Koczan & Petia Topalova, 2018. "Drivers of Labor Force Participation in Advanced Economies: Macro and Micro Evidence," IMF Working Papers 2018/150, International Monetary Fund.
    3. Manuel Bétin & Tim Bulman & Thomas Chalaux & Boris Cournède & Alain de Serres & Claude Giorno & Yvan Guillemette, 2020. "OECD contribution to the evaluation of the ESM financial assistance programme for Greece," Discussion Papers 12, European Stability Mechanism, revised 27 Oct 2021.
    4. Axel H. Börsch-Supan & Johannes Rausch & Nicolas Goll, 2020. "Social Security Reforms and the Changing Retirement Behavior in Germany," NBER Working Papers 27518, National Bureau of Economic Research, Inc.
    5. Anna Amilon & Mona Larsen, 2023. "Increasing retirement ages in Denmark: Do changes in gender, education, employment status and health matter?," European Journal of Ageing, Springer, vol. 20(1), pages 1-10, December.
    6. Povilas Lastauskas & Julius Stakénas, 2019. "Does It Matter When Labor Market Reforms Are Implemented? The Role of the Monetary Policy Environment," CESifo Working Paper Series 7844, CESifo.
    7. Campos, Nauro F. & De Grauwe, Paul & Ji, Yuemei, 2025. "Structural reforms and economic performance: the experience of advanced economies," LSE Research Online Documents on Economics 120870, London School of Economics and Political Science, LSE Library.
    8. Yvan Guillemette & David Turner, 2018. "The Long View: Scenarios for the World Economy to 2060," OECD Economic Policy Papers 22, OECD Publishing.
    9. Balázs Égert, 2018. "Regulation, Institutions and Aggregate Investment: New Evidence from OECD Countries," Open Economies Review, Springer, vol. 29(2), pages 415-449, April.
    10. Antje Mertens & Laura Romeu-Gordo, 2023. "Retirement in Western Germany – How Workplace Tasks Influence Its Timing," Work, Employment & Society, British Sociological Association, vol. 37(2), pages 467-485, April.
    11. Balazs Egert, 2022. "Public policy reforms and their impact on productivity, investment and employment: new evidence from OECD and non-OECD countries," Public Sector Economics, Institute of Public Finance, vol. 46(2), pages 179-205.
    12. Pilar García-Gómez & Sergi Jiménez-Martín & Judit Vall Castelló, 2014. "Financial Incentives, Health, and Retirement in Spain," NBER Chapters, in: Social Security Programs and Retirement Around the World: Disability Insurance Programs and Retirement, pages 455-495, National Bureau of Economic Research, Inc.
    13. Paul Bingley & Nabanita Datta Gupta & Peder J. Pedersen, 2017. "Health Capacity to Work at Older Ages in Denmark," NBER Chapters, in: Social Security Programs and Retirement around the World: The Capacity to Work at Older Ages, pages 85-110, National Bureau of Economic Research, Inc.
    14. Desmet, Raphaël & Jousten, Alain & Perelman, Sergio, 2005. "The Benefits of Separating Early Retirees from the Unemployed: Simulation Results for Belgian Wage Earners," IZA Discussion Papers 1571, IZA Network @ LISER.
    15. Ramos, Raul & Sanromá, Esteban & Simón, Hipólito, 2022. "Collective bargaining levels, employment and wage inequality in Spain," Journal of Policy Modeling, Elsevier, vol. 44(2), pages 375-395.
    16. Pérez, Carlos & Martín-Román, Ángel & Moral, Alfonso, 2020. "Two decades of the complementary leisure effect in Spain," The Journal of the Economics of Ageing, Elsevier, vol. 15(C).
    17. Erich Battistin & Michele De Nadai & Mario Padula, 2015. "Roadblocks on the Road to Grandma�s House: Fertility Consequences of Delayed Retirement," Working Papers 748, Queen Mary University of London, School of Economics and Finance.
    18. Angel de la Fuente, 2015. "Human Capital in a global and knowledge-based economy, part II: assessment at the EU country level," Working Papers 98, Barcelona School of Economics.
    19. van der Velde, Lucas, 2022. "Phasing out: Routine tasks and retirement," Journal of Comparative Economics, Elsevier, vol. 50(3), pages 784-803.
    20. Javier Diaz-Gimenez & Julian Diaz-Saavedra, 2009. "Delaying Retirement in Spain," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(1), pages 147-167, January.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ipf:psejou:v:45:y:2021:i:2:p:257-282. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Martina Fabris (email available below). General contact details of provider: https://edirc.repec.org/data/ijfffhr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.