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The impact of easy and early access to old-age benefits on exits from the labour market: a macro-micro analysis

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  • Ewa Gałecka-Burdziak

    (Warsaw School of Economics)

  • Marek Góra

    (Warsaw School of Economics
    IZA)

Abstract

We examine whether easy and early access to old-age benefits induce older workers to become inactive. We use Polish LFS data. We find added worker effect prevailing over discouraged worker effect. The latter arises after a few quarters and is asymmetric. Females permanently leave the workforce. More males leave the workforce in contractions than re-enter in expansions. If old-age benefit becomes the main source of income, the worker (after 1 year) is 8 to 20 times more likely to exit the market than unemployment or social welfare beneficiaries. Our findings support higher retirement age—the age when workers become eligible for old-age benefits. JEL classification: J14, J22

Suggested Citation

  • Ewa Gałecka-Burdziak & Marek Góra, 2016. "The impact of easy and early access to old-age benefits on exits from the labour market: a macro-micro analysis," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-18, December.
    • Handle: RePEc:spr:izaels:v:5:y:2016:i:1:d:10.1186_s40174-016-0068-z
    DOI: 10.1186/s40174-016-0068-z
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    Cited by:

    1. Ewa Galecka-Burdziak & Marek Góra, 2017. "“How do unemployed workers behave prior to retirement? A multi-state multiple-spell approach”," CeRP Working Papers 170, Center for Research on Pensions and Welfare Policies, Turin (Italy).

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    More about this item

    Keywords

    Old-age benefits; Discouraged workers; Discouraged worker effect; Exits from the labour market; Unemployment outflow; Inflow to inactivity;
    All these keywords.

    JEL classification:

    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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