Reforms of an Early Retirement Pathway in Germany and Their Labor Market Effects

Regina Riphahn and Rebecca Schrader

No 9461, CESifo Working Paper Series from CESifo

Abstract: We investigate the unemployment pathway to retirement in Germany and study the causal effects of two early retirement reforms. Reform 1 (NRA) increased normal retirement age stepwise from 60 to 65. Simultaneously, it became possible to use early retirement with benefit discounts. Reform 2 (ERA) increased the age of early retirement stepwise from 60 to 63. We investigate behavioral responses to the reforms using administrative data and difference-indifferences strategies. We find strong and significant causal effects of both reforms. Individuals postponed retirement, stayed employed longer, postponed unemployment, and shifted to alternative pathways into retirement. The overall use of the retirement system declined by about 1.5 and 2 months per person after each of the two reforms. Individuals with low pension wealth and those who were affected immediately by the reform responded more strongly.

Keywords: early retirement; program substitution; labor force participation; causal effects; difference-in-differences; effect heterogeneity (search for similar items in EconPapers)
JEL-codes: C21 H55 J26 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-eur and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp9461.pdf (application/pdf)

Related works:
Journal Article: Reforms of an early retirement pathway in Germany and their labor market effects (2023)
Working Paper: Reforms of an Early Retirement Pathway in Germany and Their Labor Market Effects (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_9461

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().