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Crowding (out) the retirees? RDD application to raising effective retirement age in Poland

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  • Pawel Strzelecki
  • Joanna Tyrowicz

Abstract

As of 2007 increased labor force participation of the elderly has been observed in Poland. In 2009 a reform in the eligibility criteria narrowed the scope of early retirement opportunities for majority of the occupations. We rely on Polish LFS and employ regression discontinuity design to isolate and evaluate the causal effect of the changes in eligibility criteria on labor force participation and exit to retirement of the affected cohorts. We find a statistically signif-icant, but economically small discontinuity at the timing of the reform. The placebo test shows no similar effects in earlier or later quarters. Yet, the pure treatment effects are insignificant in vast majority of the specification. Our conclusions are thus as follows: the changes in the eligibility criteria were not instrumental in fostering the participation rates among the affected cohort, i.e. the immediate contribution to increased labor force participation of these cohorts is not economically large.

Suggested Citation

  • Pawel Strzelecki & Joanna Tyrowicz, 2015. "Crowding (out) the retirees? RDD application to raising effective retirement age in Poland," IBS Working Papers 3/2015, Instytut Badan Strukturalnych.
    • Handle: RePEc:ibt:wpaper:wp032015
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    Keywords

    retirement age; early retirement; regression discontinuity; Poland;

    JEL classification:

    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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