Effectiveness of early retirement disincentives: Individual welfare, distributional and fiscal implications

Bönke, Timm; Kemptner, Daniel; Lüthen, Holger

doi:10.1016/j.labeco.2017.11.004

Cited by 12 publications

(13 citation statements)

References 28 publications

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“…The removal of earnings tests past the NRA induced strong increases in the number of hours of work among men ages 65-69 and women ages 60-64 in the United Kingdom [21]. Other changes to social security systems included a reduction of benefits generosity linked to early retirement among German men [27] and Swiss women [18] and the tightening of admissibility criteria to disability benefits among Austrian men [28]. These interventions were more targeted as they affected narrower age groups but induced clear changes in retirement behavior among these groups.…”

Section: Discussionmentioning

confidence: 99%

A systematic review of causes of recent increases in ages of labor market exit in OECD countries

et al. 2020

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Ages of labor market exit have increased steadily since the late 1990s in OECD countries, but with continuing population aging, there are calls for further stimulation of labor force participation at older ages. Social scientists have extensively studied causes of variation in retirement timing between individuals and across countries, but have paid less attention to causes of variation over time. This study systematically reviews evidence of causes of increases in ages of labor market exit over the past 30 years in OECD countries. Two goals are pursued: first, to provide an overview of the retirement domains that have been subject to investigation; second to compare studies with respect to the magnitude of change in retirement behavior that they attributed to different causes, in different contexts. Nineteen studies were reviewed. Available evidence articulates itself around four domains: intercohort changes in labor force participation of women (3 studies), educational attainment (3 studies) and lifetime wealth (1 study), and changes to social security systems (16 studies). Determinants in all domains explain a significant amount of past increases in ages of labor market exit, though figures attributable to similar determinants vary between studies and across countries. Evidence suggests that further postponement of labor market exit may depend on further increases to normal retirement ages and more limited access to early retirement programs, but also on further increases in educational attainment and the continued integration of women in the labor market. However, a large share of the past increases in ages of labor market exit remains unexplained; therefore, other factors such as those related to work and organizational characteristics deserve further research.

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Section: Discussionmentioning

confidence: 99%

A systematic review of causes of recent increases in ages of labor market exit in OECD countries

et al. 2020

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“…Three other recent contributions by German authors, Wübbeke (2013), Möhring and Bennett (2015) and Bönke et al. (2016) are interesting analyses in the area of early retirement, leaving the labour force before age 65. The focus below is, however, as mentioned on those who continue work beyond age 65.…”

Section: Review Of the Literaturementioning

confidence: 99%

Labour force activity after 65: what explain recent trends in Denmark, Germany and Sweden?

Larsen

Pedersen

2017

J Labour Market Res

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In most OECD member countries labour force attachment, has increased in recent years not only in the age groups 60–64 years but also among people 65 years and older. Focus in this paper is on the trend in older workers’ labour force participation in Denmark, Germany and Sweden since 2004. Main emphasis is given to people aged 65–69 years eligible for social security retirement programs from age 65. The gender aspect is included to accommodate different trends for women and men. To explain country differences in trends, the importance of changes in retirement policies of relevance for this age group and cohort relevant changes in education and health is examined and discussed. Further, country differences in the impact from education and health is examined. Results show that the largest increase in labour force participation among people aged 65–69 years has taken place in Sweden following by Germany, while the increase in Denmark is rather small. While the increase in Germany mainly seems to be a result of policy reforms, the increase in Sweden appear to be a result of a combination of policy changes and an increasing educational level. Financial incentives seem most important in Germany and only of minor importance in Denmark, where policy changes directed towards individuals above the age of 65 appear to have been too small so far to affect retirement behaviour significantly.

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“…However, so far the distributional consequences of RET policies have received less attention. One notable exception is Bönke et al (2018), who investigate the distributional effects of the introduction of an actuarial deferral option in the German early retirement system in 1992, which essentially removed a real RET. Their findings indicate large positive labor supply responses, at the cost of increased inequality.…”

Section: Introductionmentioning

confidence: 99%

Pension reform and the efficiency-equity trade-off: Impacts of removing an early retirement subsidy

Andersen¹,

Markussen²,

Røed³

2021

Labour Economics

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Any opinions expressed in this paper are those of the author(s) and not those of IZA. Research published in this series may include views on policy, but IZA takes no institutional policy positions. The IZA research network is committed to the IZA Guiding Principles of Research Integrity. The IZA Institute of Labor Economics is an independent economic research institute that conducts research in labor economics and offers evidence-based policy advice on labor market issues. Supported by the Deutsche Post Foundation, IZA runs the world's largest network of economists, whose research aims to provide answers to the global labor market challenges of our time. Our key objective is to build bridges between academic research, policymakers and society. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.

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Effectiveness of early retirement disincentives: Individual welfare, distributional and fiscal implications

Cited by 12 publications

References 28 publications

A systematic review of causes of recent increases in ages of labor market exit in OECD countries

A systematic review of causes of recent increases in ages of labor market exit in OECD countries

Labour force activity after 65: what explain recent trends in Denmark, Germany and Sweden?

Pension reform and the efficiency-equity trade-off: Impacts of removing an early retirement subsidy

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