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Labor Market and Distributional Effects of an Increase in the Retirement Age

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Listed:
  • Geyer, Johannes

    (DIW)

  • Haan, Peter

    (DIW)

  • Hammerschmid, Anna

    (DIW)

  • Peters, Michael

    (DIW)

Abstract

We evaluate the labor market and distributional effects of an increase in the early retirement age (ERA) from 60 to 63 for women. We use a regression discontinuity design which exploits the immediate increase in the ERA between women born in 1951 and 1952. The analysis is based on the German micro census which includes about 370,000 households per year. We focus on heterogeneous labor market effects on the individual and on the household level and we study the distributional implications using net household income. In this respect we extend the previous literature which mainly studied employment effects on the individual level. Our results show sizable labor market effects which strongly differ by subgroups. We document larger employment effects for women who cannot rely on other income on the household level, e.g. women with a low income partner. The distributional analysis shows on average no significant effects on female or household income. This result holds as well for heterogeneous groups: Even for the most vulnerable groups, such as single women, women without higher education, or low partner income, we do not find significant reductions in income. One reason for this result is program substitution.

Suggested Citation

  • Geyer, Johannes & Haan, Peter & Hammerschmid, Anna & Peters, Michael, 2018. "Labor Market and Distributional Effects of an Increase in the Retirement Age," Rationality and Competition Discussion Paper Series 101, CRC TRR 190 Rationality and Competition.
  • Handle: RePEc:rco:dpaper:101
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    Cited by:

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    2. Gulsara Ashirbayevna Junusbekova & Marzhan Dosymovna Zhaumitova, 2020. "The Efficacy of the Retirement Pension Provision System: Modeling, and Assessing of the Case of Kazakhstan," Journal of Open Innovation: Technology, Market, and Complexity, MDPI, Open Access Journal, vol. 6(4), pages 1-16, November.
    3. Esteban García-Miralles & Jonathan M. Leganza, 2021. "Public Pensions and Private Savings," CEBI working paper series 21-06, University of Copenhagen. Department of Economics. The Center for Economic Behavior and Inequality (CEBI).
    4. Ye, Han, 2018. "The Effect of Pension Subsidies on Retirement Timing of Older Women: Evidence from a Regression Kink Design," IZA Discussion Papers 11831, Institute of Labor Economics (IZA).
    5. Regina T. Riphahn & Rebecca Schrader, 2020. "Labor market effects of early retirement reforms," Working Papers 199, Bavarian Graduate Program in Economics (BGPE).
    6. Fischer, Björn & Müller, Kai-Uwe, 2020. "Time to care? The effects of retirement on informal care provision," Journal of Health Economics, Elsevier, vol. 73(C).
    7. Dolls, Mathias & Krolage, Carla, 2019. "The Effects of Early Retirement Incentives on Retirement Decisions," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203486, Verein für Socialpolitik / German Economic Association.
    8. Niklas Gohl & Peter Haan & Elisabeth Kurz & Felix Weinhardt, 2021. "Working life and human capital investment," CEP Discussion Papers dp1753, Centre for Economic Performance, LSE.

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    More about this item

    Keywords

    retirement age; pension reform; labor supply; early retirement; distributional effects; spillover effects; household;
    All these keywords.

    JEL classification:

    • 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
    • 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
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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