IDEAS home Printed from https://ideas.repec.org/p/crp/wpaper/152.html
   My bibliography  Save this paper

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

Author

Listed:
  • Ewa Galecka-Burdziak

    () (Warsaw School of Economics)

  • Marek Góra

    () (Warsaw School of Economics)

Abstract

We analyse whether easy and early access to old-age benefits tempts workers to become inactive. We examine the impact of old-age benefits in the light of the discouraged worker effect in Poland, a country severely experiencing the problem of population ageing. We identify cyclical properties in activity and discouraged worker rates, and estimate a set of logistic regressions to identify the determinants of exits from the labour market. In the macro analysis, the added worker effect prevails over the discouraged worker effect. The discouraged worker effect arises with a delay of a few quarters. This process is asymmetric; in duration for females and in size for males. Females often permanently leave the market, and males more likely leave the market in downturns than re-enter in expansions. In a micro perspective, if the old-age benefit becomes the main source of income for the worker within a 1-year interval, the worker is 8 to 20 times more likely to leave the workforce compared to those who receive unemployment benefits or social welfare benefits. Thus, our findings are in favour of a higher retirement age, understood as the age when workers become eligible for the old-age benefits.

Suggested Citation

  • Ewa Galecka-Burdziak & Marek Góra, 2015. "The impact of easy and early access to old-age benefits on exits from the labour market: a macro-micro analysis," CeRP Working Papers 152, Center for Research on Pensions and Welfare Policies, Turin (Italy).
  • Handle: RePEc:crp:wpaper:152
    as

    Download full text from publisher

    File URL: http://www.cerp.carloalberto.org/wp-content/uploads/2015/12/WP_152.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Maarten van Ham & Clara H. Mulder & Pieter Hooimeijer, 2001. "Local Underemployment and the Discouraged Worker Effect," Urban Studies, Urban Studies Journal Limited, vol. 38(10), pages 1733-1751, September.
    2. Gilles Saint-Paul, 2004. "Why are European Countries Diverging in their Unemployment Experience?," Journal of Economic Perspectives, American Economic Association, vol. 18(4), pages 49-68, Fall.
    3. Ewa Gałecka-Burdziak & Robert Pater, 2016. "Discouraged or Added Worker Effect: Which One Prevails in the Polish Labour Market?," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 66(3), pages 489-505, September.
    4. Kim B. Clark & Lawrence H. Summers, 1982. "Labour Force Participation: Timing and Persistence," Review of Economic Studies, Oxford University Press, vol. 49(5), pages 825-844.
    5. Julia Darby & Robert A Hart & Michaela Vecchi, 1998. "Labour Force Participation and the Business Cycle: A Comparative Analysis of Europe, Japan and the United States," Working Papers 9802, Business School - Economics, University of Glasgow.
    6. Enders, Walter & Granger, Clive W J, 1998. "Unit-Root Tests and Asymmetric Adjustment with an Example Using the Term Structure of Interest Rates," Journal of Business & Economic Statistics, American Statistical Association, vol. 16(3), pages 304-311, July.
    7. Nicole Maestas & Xiaoyan Li, 2006. "Discouraged Workers? Job Search Outcomes of Older Workers," Working Papers wp133, University of Michigan, Michigan Retirement Research Center.
    8. Enders, Walter & Siklos, Pierre L, 2001. "Cointegration and Threshold Adjustment," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(2), pages 166-176, April.
    9. Benati, Luca, 2001. "Some empirical evidence on the 'discouraged worker' effect," Economics Letters, Elsevier, vol. 70(3), pages 387-395, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    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).

    More about this item

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:crp:wpaper:152. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Silvia Maero). General contact details of provider: http://edirc.repec.org/data/cetorit.html .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.