The effects of pension changes on age of first benefit receipt: Regression discontinuity evidence from repatriated ethnic Germans

Patrick Puhani and Falko Tabbert

Labour Economics, 2016, vol. 38, issue C, 12-23

Abstract: To estimate the effects of large cuts in pensions on the age of first benefit receipt, we exploit two natural experiments in which such cuts affect a group of repatriated ethnic German workers. The pensions were cut by about 12%, yet, according to our regression discontinuity estimates using administrative pension data, there was no significant delay in the age of first pension receipt. Based on additional data sources, we also find that (i) almost all people in our study population had left the labour force by the time they became pension recipients and (ii) repatriated ethnic Germans held similar jobs to and exhibited similar retirement behaviour as low-skilled Germans. These results are consistent with low-skilled workers in Germany being frozen in a corner-solution equilibrium in which the optimal choice is to retire as early as possible.

Keywords: Policy; Evaluation; Pension reform; Labour supply; Retirement (search for similar items in EconPapers)
JEL-codes: H55 J26 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:38:y:2016:i:c:p:12-23

DOI: 10.1016/j.labeco.2015.10.003

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