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The sooner, the better? Analyzing preferences for early retirement in European countries

Author

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  • Didier Blanchet

    (INSEE institut national de la statistique et des études économiques)

  • Thierry Debrand

    (IRDES Institute for research and information in health economics)

Abstract

Individual preferences concerning retirement age are strongly differentiated both within and between countries. According to the Share survey, the proportion of workers aged from 50 to 65 who wished to retire as soon as possible in 2004 ranged from 31% in the Netherlands to 67% in Spain. Such a preference for early retirement can depend on both financial and non financial factors. Non financial factors include working conditions, health status and mortality expectations. Economic or "monetary" factors essentially correspond to the magnitude of pension entitlements and how they depend upon retirement age. Entitlements that depend positively on retirement age should reduce the motivation to retire as soon as possible. This paper compares the role of these different factors by combining individual data from the Share survey with macroeconomic indicators of pension entitlements recently produced by the OECD. Health and work conditions come out as strong determinants of the preference for early retirement. Being generally satisfied with one's work leads to a drop of approximately 16 percentage points in the probability of wishing to retire as soon as possible. Declaring oneself in bad or very bad health has a positive effect on this probability of a comparable order of magnitude. However, these non financial factors do not significantly contribute to the explanation of cross-country differentials. Conversely, financial factors seem to have a lower impact at micro-level, but a higher one for the explanation of cross-country differentials.

Suggested Citation

  • Didier Blanchet & Thierry Debrand, 2008. "The sooner, the better? Analyzing preferences for early retirement in European countries," Working Papers DT13, IRDES institut for research and information in health economics, revised Jul 2008.
  • Handle: RePEc:irh:wpaper:dt13
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    Cited by:

    1. Or, Zeynep & Cases, Chantal & Lisac, Melanie & Vrangbæk, Karsten & Winblad, Ulrika & Bevan, Gwyn, 2010. "Are health problems systemic? Politics of access and choice under Beveridge and Bismarck systems," Health Economics, Policy and Law, Cambridge University Press, vol. 5(3), pages 269-293, July.
    2. Andrew E. Clark & Yarine Fawaz, 2009. "Valuing Jobs Via Retirement: European Evidence," National Institute Economic Review, National Institute of Economic and Social Research, vol. 209(1), pages 88-103, July.
    3. Luc Behaghel & Didier Blanchet & Thierry Debrand & Muriel Roger, 2012. "Disability and Social Security Reforms: The French Case," NBER Chapters, in: Social Security Programs and Retirement around the World: Historical Trends in Mortality and Health, Employment, and Disability Insurance Participatio, pages 301-326, National Bureau of Economic Research, Inc.
    4. Thomas Barnay & Karine Briard, 2011. "Health and Early Retirement: Evidence from French Data for individuals," Economics Bulletin, AccessEcon, vol. 31(1), pages 324-341.
    5. Mario Schnalzenberger & Nicole Schneeweis & Rudolf Winter-Ebmer & Martina Zweimüller, 2014. "Job Quality and Employment of Older People in Europe," LABOUR, CEIS, vol. 28(2), pages 141-162, June.
    6. Carmen Petrovici & Jörg Neugschwender, 2014. "Who can (still) afford to retire early? Cross-country comparison of incomes of senior workers and young retirees using LIS data for 2007 & 2010," LIS Working papers 608, LIS Cross-National Data Center in Luxembourg.
    7. Thierry Debrand & Christine Sorasith, 2010. "Bouclier sanitaire : choisir entre égalité et équité ? Une analyse à partir du modèle ARAMMIS," Working Papers DT32, IRDES institut for research and information in health economics, revised Jun 2010.
    8. Melika Ben Salem & Didier Blanchet & Antoine Bozio & Muriel Roger, 2010. "Labor Force Participation by the Elderly and Employment of the Young: The Case of France," NBER Chapters, in: Social Security Programs and Retirement around the World: The Relationship to Youth Employment, pages 119-146, National Bureau of Economic Research, Inc.
    9. Thierry Debrand & Nicolas Sirven, 2009. "What are the Motivations of Pathways to Retirement in Europe: Individual, Familial, Professional Situation or Social Protection Systems?," Working Papers DT28, IRDES institut for research and information in health economics, revised Oct 2009.
    10. Hélène Blake & Clémentine Garrouste, 2017. "Collateral effects of a pension reform in France," Working Papers halshs-00703706, HAL.
    11. repec:dau:papers:123456789/12129 is not listed on IDEAS
    12. Boman, Anders, 2015. "Spending time together? Effects on the retirement decision from partner’s labour market status," Working Papers in Economics 618, University of Gothenburg, Department of Economics.
    13. Didier Blanchet & Thierry Debrand, 2008. "The sooner, the better? Analyzing preferences for early retirement in European countries," Working Papers DT13, IRDES institut for research and information in health economics, revised Jul 2008.
    14. Helene Blake; & Clementine Garrouste, "undated". "Collateral effects of a pension reform in France," Health, Econometrics and Data Group (HEDG) Working Papers 12/16, HEDG, c/o Department of Economics, University of York.
    15. Ulrike Famira-Mühlberger & Ulrike Huemer & Christine Mayrhuber, 2015. "Der Einfluss der sozialen Sicherungssysteme auf die Beschäftigungsquote Älterer in traditionellen Wohlfahrtsstaaten," WIFO Working Papers 499, WIFO.
    16. Hélène Blake & Clémentine Garrouste, 2017. "Collateral effects of a pension reform in France," PSE Working Papers halshs-00703706, HAL.

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    More about this item

    Keywords

    Retirement; Monetary factor; Health; Job satisfaction;
    All these keywords.

    JEL classification:

    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • I10 - Health, Education, and Welfare - - Health - - - General
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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