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The Unintended Consequences of a Pension Age Increase. Evidence from Ireland

Author

Listed:
  • Tuda, Dora

    (Economic and Social Research Institute)

  • Doorley, Karina

    (Economic and Social Research Institute, Dublin)

  • Sandorova, Simona

    (Maastricht University)

Abstract

We examine the labour market, welfare receipt and health effects of a reform to the Irish State Pension system which increased the age at which some workers could claim a State Pension. We use longitudinal data on ageing in Ireland and a causal identification strategy based on the random date of birth threshold around which workers with adequate contributions are differently affected by the reform. We find that the reform does not increase the employment probability of those affected. However, we find an increased probability of disability payment receipt for those affected by the reform (+12-13 pp). This effect is robust to extensive sensitivity analysis, multiple hypothesis testing and alternative identification methods. We also find an increase in the probability of receiving unemployment benefit. We find little evidence of worsening mental health outcomes and no effect on subjective or objective physical health outcomes for those affected by the reform.

Suggested Citation

  • Tuda, Dora & Doorley, Karina & Sandorova, Simona, 2026. "The Unintended Consequences of a Pension Age Increase. Evidence from Ireland," IZA Discussion Papers 18411, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp18411
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    Keywords

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    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • 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
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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