Crowding (out) the retirees? RDD application to raising effective retirement age in Poland

Paweł Strzelecki and Joanna Tyrowicz

No 2015-10, Working Papers from Faculty of Economic Sciences, University of Warsaw

Abstract: As of 2007 increased labor force participation of the elderly has been observed in Poland. In 2009 a reform in the eligibility criteria narrowed the scope of early retirement opportunities for majority of the occupations. While labor force participation in the directly affected cohorts continued to grow, but an increase already prior to the reform hints that other factors may have been at play as well. The objective of this paper is to isolate and evaluate the causal ef-fect of the changes in eligibility criteria on labor force participation and exit to retirement of the affected cohorts. We rely on Polish Labor Force Survey and employ regression disconti-nuity design to evaluate the change in participation subsequent to the eligibility reform among the treated cohorts. We find a statistically significant, but economically small discontinuity at the timing of the reform. The placebo test shows no similar effects in earlier or later quarters. Yet, the pure treatment effects are insignificant in vast majority of the specification. Our con-clusions are thus as follows: the changes in the eligibility criteria were not instrumental in fostering the participation rates among the affected cohort, i.e. the immediate contribution to increased labor force participation of these cohorts is not economically large.

Keywords: retirement age; early retirement; regression discontinuity; Poland (search for similar items in EconPapers)
JEL-codes: J14 J26 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2015
New Economics Papers: this item is included in nep-age, nep-dem, nep-eur and nep-tra
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Persistent link: https://EconPapers.repec.org/RePEc:war:wpaper:2015-10

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