IDEAS home Printed from https://ideas.repec.org/a/ipf/psejou/v49y2025i3p339-367.html
   My bibliography  Save this article

Is it worth raising the normal retirement age? A new model to estimate the employment effects

Author

Listed:
  • Hermes Morgavi

    (OECD Economics Department, Paris, France)

Abstract

Pension reforms, that raise the normal retirement ages, are crucial yet controversial in ageing developed countries. While cross-country studies confirm positive significant effects, their estimated effects are modest compared to those from country-specific studies using micro data. This study attempts to reconcile these differences by introducing greater heterogeneity into the cross-country approach. Starting from a standard cross-country panel error correction model, several empirical innovations are introduced to better capture the influence of the demographic composition of countries, the possibility of retiring at an earlier age, and the importance of private pension funds and early exit pathways. These changes result in larger and more heterogeneous predicted effects of changes in the normal retirement ages on the older-age employment rate and average age of labour market exit across countries. The proposed model, allows for simulations on the effects of pension policy reforms.

Suggested Citation

  • Hermes Morgavi, 2025. "Is it worth raising the normal retirement age? A new model to estimate the employment effects," Public Sector Economics, Institute of Public Finance, vol. 49(3), pages 339-367.
  • Handle: RePEc:ipf:psejou:v:49:y:2025:i:3:p:339-367
    DOI: 10.3326/pse.49.3.1
    as

    Download full text from publisher

    File URL: http://pse-journal.hr/upload/files/pse/2025/3/morgavi.pdf
    Download Restriction: no

    File URL: https://libkey.io/10.3326/pse.49.3.1?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
    ---><---

    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:49:y:2025:i:3:p:339-367. 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.

    We have no bibliographic references for this item. You can help adding them by using 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.