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'Voluntary' and 'Involuntary' Early Retirement: An International Analysis

  • Dorn, David


    (University of Zurich)

  • Sousa-Poza, Alfonso


    (University of Hohenheim)

Recent literature makes a distinction between 'voluntary' and 'involuntary' early retirement, where 'involuntary' early retirement results from employment constraints rather than from a preference for leisure relative to work. This paper analyzes 'voluntary' and 'involuntary' early retirement based on international microdata covering 19 industrialized countries. The results show that 'involuntary' early retirement is particularly widespread in Continental Europe. Countries facing economic recessions and having strict employment protection legislation have higher shares of 'involuntary' retirements among early retirees. Generous early retirement provisions of the social security system do not only make 'voluntary' early retirement more attractive for individuals, but also induce firms to push more employees into early retirement.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2714.

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Length: 30 pages
Date of creation: Mar 2007
Date of revision:
Publication status: published in: Applied Economics, 2010, 42 (4), 427-438
Handle: RePEc:iza:izadps:dp2714
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  10. David Dorn & Alfonso Sousa-Poza, 2003. "Why is the Employment Rate of Older Swiss so High? An Analysis of the Social Security System," The Geneva Papers on Risk and Insurance, The International Association for the Study of Insurance Economics, vol. 28(4), pages 652-672, October.
  11. David Dorn & Alfonso Sousa-Poza, 2005. "The Determinants of Early Retirement in Switzerland," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 141(II), pages 247-283, June.
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