Are we doing enough to discourage early retirement?
Increasing the effective retirement age contributes to the sustainability of pension systems. However, oftentimes policies aiming at rising employment rates of older workers fall short in delaying retirement. This seems to be the case with retirement age flexibility reforms in Portugal. We analyze the recent Portuguese history of incentives to retire. For 1990-2006 we find that individuals faced very high implicit taxes on working with the result that half the workers had already left the labour force before age 65. We then look at the Social Security reforms in 2007 and find that the incentives to continue working became even smaller than they already were. We conclude that increasing the labour supply of older workers in a system with flexible retirement age needs policies with more aggressive use of penalties and bonuses than what decision makers were willing to accept.
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- Paula Albuquerque & Manuela Arcanjo & Vítor Escária, 2009. "Early Retirement in Portugal," Working Papers Department of Economics 2009/39, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
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Diskussionspapiere aus dem Institut für Volkswirtschaftslehre der Universität Hohenheim
311/2009, Department of Economics, University of Hohenheim, Germany.
- Fischer, Justina AV & Sousa-Poza, Alfonso, 2009. "The Effect of Pension Generosity on Early Retirement: A Microdata Analysis for Europe from 1967 to 2004," MPRA Paper 15940, University Library of Munich, Germany.
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