The Unintended Consequences of a Pension Age Increase. Evidence from Ireland

Dora Tuda (), Karina Doorley () and Simona Sandorova ()
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Dora Tuda: Economic and Social Research Institute
Karina Doorley: Economic and Social Research Institute, Dublin
Simona Sandorova: Maastricht University

No 18411, IZA Discussion Papers from IZA Network @ LISER

Abstract: We examine the labour market, welfare receipt and health effects of a reform to the Irish State Pension system which increased the age at which some workers could claim a State Pension. We use longitudinal data on ageing in Ireland and a causal identification strategy based on the random date of birth threshold around which workers with adequate contributions are differently affected by the reform. We find that the reform does not increase the employment probability of those affected. However, we find an increased probability of disability payment receipt for those affected by the reform (+12-13 pp). This effect is robust to extensive sensitivity analysis, multiple hypothesis testing and alternative identification methods. We also find an increase in the probability of receiving unemployment benefit. We find little evidence of worsening mental health outcomes and no effect on subjective or objective physical health outcomes for those affected by the reform.

Keywords: pension age; labour supply; welfare; health (search for similar items in EconPapers)
JEL-codes: I10 J14 J18 J26 (search for similar items in EconPapers)
Date: 2026-03
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