Retirement Decisions in Transition: Microeconometric Evidence from Slovenia

Sašo Polanec, Aleš Ahčan and Miroslav Verbič

MPRA Paper from University Library of Munich, Germany

Abstract: In this article, we analyse old-age retirement decisions of Slovenian men and women, eligible to retire in the period 1997-2003. In comparison to established market economies, we find relatively high hazard rates of retirement that decline with age. This unusual pattern can partly be attributed to weak incentives to work, inherent in the design of the pension system and reflected in predominantly negative values of accruals, and to transition-specific increase in wage inequality in the late 1980s and early 1990s. This is reflected in low wages and relatively high pensions of less productive (skilled) workers and vice versa. We find that the probability of retirement decreases with option value to work and net wages, although the response to the former, when controlling for the latter, is rather weak. Our results also imply that less educated individuals and individuals with greater personal wealth are more likely to retire.

Keywords: option value; retirement decisions; transition (search for similar items in EconPapers)
JEL-codes: H55 J20 J26 (search for similar items in EconPapers)
Date: 2010-12
New Economics Papers: this item is included in nep-age, nep-lab and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Retirement decisions in transition: microeconometric evidence from Slovenia (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:28460

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