Retirement Age Reforms and Worker Substitutability: Implications for Employment of Older Workers

Sona Badalyan
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Sona Badalyan: Institute for Employment Research (IAB), Nuremberg, Germany ; CERGE-EI

No 202514, IAB-Discussion Paper from Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]

Abstract: "This paper studies how labor demand factors - specifically worker substitutability and job-specific skills - shape employment responses to a rise in the early retirement age. Using a regression discontinuity design, I exploit a 1999 German reform that eliminated the option for women to retire at age 60. Before the reform, older workers could exit voluntarily, thereby imposing turnover costs on firms. Afterward, firms were better able to retain less substitutable workers for whom turnover costs are higher. At the same time, the loss of early pension eligibility reduced workers’ outside options, allowing firms to offer lower wages, often through partial retirement." (Author's abstract, IAB-Doku) ((en))

Keywords: Bundesrepublik Deutschland; Stichprobe Integrierter Employer-Employee Daten; Auswirkungen; berufliche Spezialisierung; Berufsausstieg; Beschäftigungseffekte; Einkommenseffekte; erwerbstätige Frauen; ältere Arbeitnehmer; Altersteilzeit; Personalersatzbedarf; Rentenalter; Rentenreform; Mitarbeiterbindung; Substitutionspotenzial; Arbeitskräftenachfrage; 1975-2018 (search for similar items in EconPapers)
JEL-codes: H32 H55 J21 J24 J26 (search for similar items in EconPapers)
Pages: 89 pages
Date: 2025-10-14
New Economics Papers: this item is included in nep-age, nep-eur, nep-lma and nep-pbe
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https://doi.org/10.48720/IAB.DP.2514

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Persistent link: https://EconPapers.repec.org/RePEc:iab:iabdpa:202514

DOI: 10.48720/IAB.DP.2514

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