Labor supply effects of a subsidized old-age part-time scheme in Austria

Abstract

In this paper we evaluate the impact of the oldage part-time scheme (OAPT) on the Austrian labor market which was a policy to allow flexible retirement options for the elderly with an aim to increase labor supply. According to our matching estimates, employment probability increases slightly; especially in the first two years after entrance into the programme. Furthermore, the programme seems to reduce the measured unemployment risk. However, the total number of hours worked is significantly reduced by OAPT. While the policy is meant to reduce early exit from the labor force by allowing part-time work, our analysis indicates that most workers substitute part-time work for fulltime work and thus the overall effect is rather negative.Keywords Evaluation of labor market programmes · Labor supply of the elderly · Nearest neighbor matching

How to combine the entry of young people in the labour market with the retention of older workers?

“…Indeed, at best it was neutral regarding its effects on younger workers while effectively lowering the employment rate of older workers. This is also confirmed by the similar case of Austria (Graf et al 2011). Furthermore, the costs for subsidised early retirement had to be borne by employers and employees via social security contributions.…”

Retaining older workers: The effect of phasedretirement on delaying early retirement

“…In contrast to the many alleged advantages brought about by phased retirement, measures promoting a smooth transition between full employment and full retirement are rare in most countries. Thus, research on the laboursupply effects of these measures in respect of retaining older workers is limited (Graf, Hofer, & Winter-Ebmer, 2011;Hutchens & GraceMartin, 2006;Taylor, 2006).…”

Did the Intergenerational Solidarity Pact increase the employment rate of older workers in Belgium? A macro-econometric evaluation

“…Care-giving by grandparents could have an induced effect of the labor supply of their children (on this possibility see also Gielen 2009). All in all, the international evidence about the causal impact of subsidized part-time schemes on the employment rate of old workers remains mixed, with negative effects in Austria (Graf et al 2011) and Portugal (Machado and Portela 2012) but positive ones in Germany (Huber et al 2013).…”