Retirement, Early Retirement and Disability: Explaining Labor Force Participation after 55 in France

Luc Behaghel, Didier Blanchet and Muriel Roger

Working papers from Banque de France

Abstract: We analyze the influence of health and financial incentives on the retirement behavior of older workers in France, building upon Stock and Wise (1990) option value approach. The model accounts for three main retirement routes: the normal retirement, disability insurance (DI) and unemployment/preretirement pathways, and is estimated with a combination of microeconomic datasets that include the French data of the European SHARE survey. The estimates confirm that a decrease in the generosity of the pension and DI schemes induces people to stay longer in the labor market, and that people with better health tend to retire later. We present extreme situations simulating what individual's retirement behavior would have been if only one retirement route had existed and in the absence of constraints on work capabilities. We show that average years of work between 55 and 64 are nearly 14% greater when regular retirement incentives are applied to the whole population than when it is DI rules that are systematically applied.

Keywords: Pensions; Social Security; Disability; Labor force participation; Senior. (search for similar items in EconPapers)
JEL-codes: H55 J14 J26 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2014
New Economics Papers: this item is included in nep-age, nep-dem, nep-eur, nep-hea and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Related works:
Chapter: Retirement, Early Retirement, and Disability: Explaining Labor Force Participation after Fifty-Five in France (2014)
Working Paper: Retirement, Early Retirement and Disability: Explaining Labor Force Participation after 55 in France (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:bfr:banfra:500

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