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Pension Incentives and Early Retirement

Author

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  • Barbara Engels
  • Johannes Geyer
  • Peter Haan

Abstract

In this paper we exploit a cohort-specific pension reform to estimate the causal labour market effects of changes in the financial incentives to retire. In particular, we analyze the effects of the introduction of cohort-specific deductions for early retirement on female retirement, employment and unemployment. For the empirical analysis we use high-quality administrative data from the German pension insurance. We present evidence for sizable labour market effects. In addition to direct effects on women older than 60 we find important anticipation effects before reaching the pension eligibility age. Overall we document that the pension reform leads to a postponement of retirement, an increase in employment and a shifting in unemployment over age rather than a substitution into unemployment.

Suggested Citation

  • Barbara Engels & Johannes Geyer & Peter Haan, 2016. "Pension Incentives and Early Retirement," Discussion Papers of DIW Berlin 1617, DIW Berlin, German Institute for Economic Research.
  • Handle: RePEc:diw:diwwpp:dp1617
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Geyer, Johannes & Welteke, Clara, 2017. "Closing Routes to Retirement: How Do People Respond?," IZA Discussion Papers 10681, Institute of Labor Economics (IZA).
    2. Geyer, Johannes & Haan, Peter & Hammerschmid, Anna & Peters, Michael, 2018. "Labor Market and Distributional Effects of an Increase in the Retirement Age," IZA Discussion Papers 11618, Institute of Labor Economics (IZA).
    3. repec:iab:iabfme:201801_en is not listed on IDEAS
    4. Ye, Han, 2018. "The Effect of Pension Subsidies on Retirement Timing of Older Women: Evidence from a Regression Kink Design," IZA Discussion Papers 11831, Institute of Labor Economics (IZA).
    5. Steve Briand, 2018. "Time Inconsistency and Delayed Retirement Decision: the French Pension Bonus," Working Papers hal-01891755, HAL.
    6. Mathias Dolls & Carla Krolage, 2019. "The Effects of Early Retirement Incentives on Retirement Decisions," ifo Working Paper Series 291, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.

    More about this item

    Keywords

    Retirement age; pension reform; labour supply; actuarial deductions; cohort-specific pension reform; labour market effects;

    JEL classification:

    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation

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