Forward-Looking Labor Supply Responses to Changes in Pension Wealth: Evidence from Germany

Elisabeth Artmann (), Nicola Fuchs-Schündeln () and Giulia Giupponi ()
Additional contact information
Elisabeth Artmann: Institute for Employment Research (IAB), Nuremberg
Nicola Fuchs-Schündeln: Goethe University Frankfurt
Giulia Giupponi: Bocconi University

No 16132, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We provide new evidence of forward-looking labor supply responses to changes in pension wealth. We exploit a 2014 German reform that increased pension wealth for mothers by an average of 4.4% per child born before January 1, 1992. Using administrative data on the universe of working histories, we implement a difference-in-differences design comparing women who had their first child before versus after January 1, 1992. We document significant reductions in labor earnings, driven by intensive margin responses. Our estimates imply that, on average, an extra euro of pension wealth in a given period reduces unconditional labor earnings by 54 cents.

Keywords: labor supply; social security; pension wealth (search for similar items in EconPapers)
JEL-codes: H55 J22 J26 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2023-05
New Economics Papers: this item is included in nep-age, nep-eur and nep-lma
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Citations: View citations in EconPapers (6)

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