Effects of changes in early retirement policies on labor force participation: the differential effects for vulnerable groups

Abstract

Objectives: This study investigated the effects of a national early retirement reform, which was implemented in 2006 and penalized early retirement, on paid employment and different exit pathways and examined whether these effects differ by gender, income level and health status. Methods: This study included all Dutch individuals in paid employment born six months before (control group) and six months after (intervention group) the cut-off date of the reform (1 January 1950) that fiscally penalized early retirement. A regression discontinuity design combined with restricted mean survival time analysis was applied to evaluate the effect of penalizing early retirement on labor force participation from age 60 until workers reached the retirement age of 65 years, while accounting for secular trends around the threshold. Results: The intervention group postponed early retirement by 7.41 months [95% confidence interval (CI) 6.11–8.72], and partly replaced this by remaining 4.87 months (95% CI 3.60–6.24) longer in paid employment. Workers born after the threshold, annually earning €25 000–40 000, spent 1.24 months (95% CI 0.31–2.18) more in economic inactivity than those born before. The working months lost to unemployment increased by 1.50 months (95% CI 0.30–2.71) for female workers and 1.99 months (95% CI 0.06–3.92) for workers reporting multiple chronic diseases. Conclusions: The national reform successfully prolonged working lives of older workers. However, workers with a middle income, female workers, and workers with chronic diseases were more vulnerable to premature exit from the labor market through unemployment or being without any income or benefit.

Work-limiting musculoskeletal pain and its association with loss of paid employment among senior workers: prospective cohort study with register follow-up

“… 2–7 At macro level, societal structures such as economic (dis)incentives can have profound impact on labor market participation. 4 , 6 Likewise, ergonomic and psychosocial working conditions have also been reported as important determinants. 2 , 6 Furthermore, individual circumstances related to health, private life and leisure have also shown to influence labor market participation.…”

Tightening Access to Early Retirement: Who Can Adapt?

“…There is also some evidence on heterogeneous effects of pension reforms. Hanel (2012), Staubli & Zweimüller (2013), Geyer et al (2020) or Oude Hengel et al (2021) show different reform effects with respect to health status and/or income. Hanel & Riphahn (2012) and Buchholz et al (2013) differentiate their analyses with respect to education.…”

The influence of chronic diseases and poor working conditions in working life expectancy across educational levels among older employees in the Netherlands

“…The measures of WLE and WYL are relevant metrics, summarizing information over the working life course. This information can also be used to study the impact of policy changes (31). The measure of WLE may for example guide policymakers in the discussion concerning elevating retirement age.…”