Ho to Delay Labor Market Exit and Pension Claiming?

Stefan Staubli and Rafael Lalive

VfS Annual Conference 2016 (Augsburg): Demographic Change from Verein für Socialpolitik / German Economic Association

Abstract: Understanding labor market exit and pension claiming is central to pension reform. We study a Swiss reform delaying access to a full retirement pension by two years, from 62 to 64 years, by reducing early pensions by 3.4 % initially, then by 6.8 %, per year of early claiming. We find that increasing the full retirement age (FRA) by one year delays labor market exit by 4 to 6 months, affecting women who leave the labor force at the FRA. Increasing the FRA by one year delays claiming of retirement benefits by 6 to 8 months. Doubling the early retirement penalty, from 3.4% to 6.8%, delays pension claiming by almost 4 months but has no effect on labor market exit. Raising the FRA lowers social security benefits and social security wealth, by about 3 %. Doubling the early retirement penalty neither affect benefits nor social security wealth. An FRA that acts as a default retirement age generates strong effects on work and pension decisions.

JEL-codes: H55 J21 J26 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-age, nep-eur and nep-pbe
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc16:145550

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