Early retirement incentives and transition into informality

Gunes Asik

Labour Economics, 2024, vol. 90, issue C

Abstract: This paper explores the impact of a super early retirement incentive that allowed men to retire as early as 44 years old in Turkey in 1992. Relying on a Fuzzy Regression Discontinuity Design, I find that taking up the incentives significantly reduced the labor force participation of middle-aged men in Turkey. Analysis by education categories suggests that the incentives had an impact on both the skilled and unskilled labor force. I find that the policy-induced take-up of pension benefit receipt significantly increased the probability of moving into informal employment contracts. Findings suggest that the probability of informal wage employment increased for low-skilled individuals while the probability of informal self-employment probability increased for high-skilled individuals. Among low-skilled workers, the incentives seem to have relaxed credit constraints.

Keywords: Retirement; Pension reforms; Labor Markets; Informality (search for similar items in EconPapers)
JEL-codes: J08 J16 J22 J26 J32 K31 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:90:y:2024:i:c:s0927537124000563

DOI: 10.1016/j.labeco.2024.102561

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