Pension Incentives and Labor Supply: Evidence from the Introduction of Universal Old-Age Assistance in the UK

Matthias Giesecke and Philipp Jaeger
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Philipp Jaeger: RWI

No 14469, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We study the labor supply implications of the Old-Age Pension Act (OPA) of 1908, which, for the first time, provided pensions to older people in the UK. Using recently released census data covering the entire population, we exploit variation at the newly created age-based eligibility threshold. Our results show a considerable and abrupt decline in labor force participation of 6.0 percentage points (13%) when older workers reach the eligibility age of 70. To mitigate the impact of population aging today, pension reforms aimed at increasing elderly labor supply, however, have to induce much larger behavioral responses than the OPA.

Keywords: regression discontinuity design; retirement; labor supply; old-age assistance; equity-efficiency trade-off (search for similar items in EconPapers)
JEL-codes: D61 H21 H55 J14 J22 J26 (search for similar items in EconPapers)
Pages: 69 pages
Date: 2021-06
New Economics Papers: this item is included in nep-age, nep-dem and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Published - published in: Journal of Public Economics, 2021, 203, 104516

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Journal Article: Pension incentives and labor supply: Evidence from the introduction of universal old-age assistance in the UK (2021)
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