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Crowding (out) the retirees? RDD application to raising effective retirement age in Poland

Author

Listed:
  • Paweł Strzelecki

    () (Warsaw School of Economics; National Bank of Poland)

  • Joanna Tyrowicz

    (Faculty of Economic Sciences, University of Warsaw; National Bank of Poland)

Abstract

As of 2007 increased labor force participation of the elderly has been observed in Poland. In 2009 a reform in the eligibility criteria narrowed the scope of early retirement opportunities for majority of the occupations. While labor force participation in the directly affected cohorts continued to grow, but an increase already prior to the reform hints that other factors may have been at play as well. The objective of this paper is to isolate and evaluate the causal ef-fect of the changes in eligibility criteria on labor force participation and exit to retirement of the affected cohorts. We rely on Polish Labor Force Survey and employ regression disconti-nuity design to evaluate the change in participation subsequent to the eligibility reform among the treated cohorts. We find a statistically significant, but economically small discontinuity at the timing of the reform. The placebo test shows no similar effects in earlier or later quarters. Yet, the pure treatment effects are insignificant in vast majority of the specification. Our con-clusions are thus as follows: the changes in the eligibility criteria were not instrumental in fostering the participation rates among the affected cohort, i.e. the immediate contribution to increased labor force participation of these cohorts is not economically large.

Suggested Citation

  • Paweł Strzelecki & Joanna Tyrowicz, 2015. "Crowding (out) the retirees? RDD application to raising effective retirement age in Poland," Working Papers 2015-10, Faculty of Economic Sciences, University of Warsaw.
  • Handle: RePEc:war:wpaper:2015-10
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    File URL: http://www.wne.uw.edu.pl/index.php/download_file/1566/
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    References listed on IDEAS

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    More about this item

    Keywords

    retirement age; early retirement; regression discontinuity; Poland;

    JEL classification:

    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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