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Policy Variation, Labor Supply Elasticities, and a Structural Model of Retirement

Author

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  • Day Manoli
  • Kathleen J. Mullen
  • Mathis Wagner

Abstract

This paper exploits a combination of policy variation from multiple pension reforms in Austria and administrative data from the Austrian Social Security Database. Using the policy changes for identification, we estimate social security wealth and accrual elasticities in individuals' retirement decisions. Next, we use these elasticities to estimate a dynamic programming model of retirement decisions. Finally, we use the estimated model to examine the labor supply and welfare consequences of potential social security reforms.

Suggested Citation

  • Day Manoli & Kathleen J. Mullen & Mathis Wagner, 2014. "Policy Variation, Labor Supply Elasticities, and a Structural Model of Retirement," Working Papers WR-1068, RAND Corporation.
    • Handle: RePEc:ran:wpaper:wr-1068
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    References listed on IDEAS

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    Cited by:

    1. Bönke, Timm & Kemptner, Daniel & Lüthen, Holger, 2018. "Effectiveness of early retirement disincentives: Individual welfare, distributional and fiscal implications," Labour Economics, Elsevier, vol. 51(C), pages 25-37.
    2. Benxi Lin & Zongjian Lin & Yu Yvette Zhang & Weiping Liu, 2018. "The Impact of the New Rural Pension Scheme on Retirement Sustainability in China: Evidence of Regional Differences in Formal and Informal Labor Supply," Sustainability, MDPI, vol. 10(12), pages 1-7, November.
    3. Day Manoli & Andrea Weber, 2016. "Nonparametric Evidence on the Effects of Financial Incentives on Retirement Decisions," American Economic Journal: Economic Policy, American Economic Association, vol. 8(4), pages 160-182, November.
    4. Major, Klára & Varga, Gergely, 2013. "Parametrikus nyugdíjreformok és életciklus-munkakínálat [Parametric pension reforms and life-cycle labour supply]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(11), pages 1169-1207.
    5. Mathias Dolls & Karina Doorley & Alari Paulus & Hilmar Schneider & Sebastian Siegloch & Eric Sommer, 2017. "Fiscal sustainability and demographic change: a micro-approach for 27 EU countries," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 24(4), pages 575-615, August.
    6. Songül Tolan, 2017. "The Effect of Partial Retirement on Labor Supply, Public Balances and the Income Distribution: Evidence from a Structural Analysis," Discussion Papers of DIW Berlin 1679, DIW Berlin, German Institute for Economic Research.
    7. Andrew Beauchamp & Mathis Wagner, 2012. "Dying to Retire: Adverse Selection and Welfare in Social Security," Boston College Working Papers in Economics 818, Boston College Department of Economics, revised 15 Aug 2013.

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    More about this item

    Keywords

    policy variation; retirement; labor supply elasticities;
    All these keywords.

    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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