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Ho to Delay Labor Market Exit and Pension Claiming?

Listed author(s):
  • Staubli, Stefan
  • Lalive, Rafael

Understanding labor market exit and pension claiming is central to pension reform. We study a Swiss reform delaying access to a full retirement pension by two years, from 62 to 64 years, by reducing early pensions by 3.4 % initially, then by 6.8 %, per year of early claiming. We find that increasing the full retirement age (FRA) by one year delays labor market exit by 4 to 6 months, affecting women who leave the labor force at the FRA. Increasing the FRA by one year delays claiming of retirement benefits by 6 to 8 months. Doubling the early retirement penalty, from 3.4% to 6.8%, delays pension claiming by almost 4 months but has no effect on labor market exit. Raising the FRA lowers social security benefits and social security wealth, by about 3 %. Doubling the early retirement penalty neither affect benefits nor social security wealth. An FRA that acts as a default retirement age generates strong effects on work and pension decisions.

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File URL: https://www.econstor.eu/bitstream/10419/145550/1/VfS_2016_pid_6382.pdf
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Paper provided by Verein für Socialpolitik / German Economic Association in its series Annual Conference 2016 (Augsburg): Demographic Change with number 145550.

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Date of creation: 2016
Handle: RePEc:zbw:vfsc16:145550
Contact details of provider: Web page: http://www.socialpolitik.org/
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  9. Butler, Monika & Teppa, Federica, 2007. "The choice between an annuity and a lump sum: Results from Swiss pension funds," Journal of Public Economics, Elsevier, vol. 91(10), pages 1944-1966, November.
  10. Jonathan Cribb & Carl Emmerson & Gemma Tetlow, 2013. "Incentives, shocks or signals: labour supply effects of increasing the female state pension age in the UK," IFS Working Papers W13/03, Institute for Fiscal Studies.
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