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The Effect of Firms’ Phased Retirement Policies on the Labor Market Outcomes of Their Employees


  • Martin Huber
  • Michael Lechner
  • Conny Wunsch


In this article, the authors assess the impact on male employees’ labor market outcomes of firms offering a special form of phased retirement. The goal of the program is to smooth the transition from work to retirement and to decrease the costs of public pension and unemployment insurance schemes by increasing the employment of elderly workers. Using a unique linked employer-employee data set, the authors examine whether male employees spend more time in employment and less time in unemployment or inactivity after the introduction of the program. Results suggest that phased retirement options offered by firms can help to reduce some of the public costs of low labor force attachment of elderly workers, mainly by reducing exits through unemployment and by increasing employment and earnings. Under relatively good labor market conditions, they may also encourage a small share of workers to exit the labor market earlier.

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  • Martin Huber & Michael Lechner & Conny Wunsch, 2016. "The Effect of Firms’ Phased Retirement Policies on the Labor Market Outcomes of Their Employees," ILR Review, Cornell University, ILR School, vol. 69(5), pages 1216-1248, October.
  • Handle: RePEc:sae:ilrrev:v:69:y:2016:i:5:p:1216-1248

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    Cited by:

    1. Songül Tolan, 2017. "The Effect of Partial Retirement on Labor Supply, Public Balances and the Income Distribution: Evidence from a Structural Analysis," Discussion Papers of DIW Berlin 1679, DIW Berlin, German Institute for Economic Research.


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