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The Effects of the Early Retirement Age on Retirement Decisions

Author

Listed:
  • Manoli, Dayanand

    (University of Texas at Austin)

  • Weber, Andrea

    (Central European University)

Abstract

We present quasi-experimental evidence on the effects of increasing the Early Retirement Age (ERA) on older workers' retirement decisions. The analysis is based on social security reforms in Austria in 2000 and 2004, and administrative data allows us to distinguish between pension claims and job exits. Using a Regression Kink Design, we estimate that, within a birth cohort, a 1.0 year increase in the ERA leads to a 0.4 year increase in the average job exiting age and a 0.5 year increase in the average pension claiming age. When the ERA increases, many older workers remain in their jobs longer.

Suggested Citation

  • Manoli, Dayanand & Weber, Andrea, 2016. "The Effects of the Early Retirement Age on Retirement Decisions," IZA Discussion Papers 10154, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp10154
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    More about this item

    Keywords

    retirement; early retirement age; pension reform; life cycle labor supply; regression kink design;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • 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

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