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Impact of Raising the Retirement Age on Firms

Author

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  • Stefan Hut

Abstract

This work studies the impact of raising the retirement age on firms. I rely on a policy change in the Netherlands that sharply increased the effective retirement age for workers born after 1950. For every additional retained older worker due to the reform, firms employ 0.6 fewer younger workers and reduce investments by 6,000 EUR annually. Adjustments are concentrated in low free cash flow firms, and only these firms experience declines in revenue and profitability. Lastly, I show that more time to respond to the policy implementation helps firms smooth adjustments and reduce negative profit effects.

Suggested Citation

  • Stefan Hut, 2026. "Impact of Raising the Retirement Age on Firms," Journal of Human Resources, University of Wisconsin Press, vol. 61(2), pages 622-656.
    • Handle: RePEc:uwp:jhriss:v:61:y:2026:i:2:p:622-656
    Note: DOI: https://doi.org/10.3368/jhr.0821-11820R2
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    File URL: http://jhr.uwpress.org/cgi/reprint/61/2/622
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    More about this item

    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy

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