Ageing and unused capacity in Europe: is there an early retirement trap?

The strategic bequest motive: evidence from SHARE

Viola Angelini, Agar Brugiavini and Guglielmo Weber

Economic Policy, 2009, vol. 24, issue 59, 463-508

Abstract: We address the issue of how early retirement may interact with limited use of financial markets in producing financial hardship later in life, when some risks (such as long-term care) are not insured. We argue that the presence of financially attractive early retirement schemes in a world of imperfect financial and insurance markets can lead to an ‘early retirement trap’. Indeed, Europe witnesses many (early) retired individuals in financial distress. In our analysis we use data on 10 European countries, which differ in their pension and welfare systems, in prevailing retirement age and in households’ access to financial markets. We find evidence that an early retirement trap exists, particularly in some Southern and Central European countries: people who retired early in life are more likely to be in financial hardship in the long run. Our analysis implies that governments should stop making early retirement attractive, let retirees go back to work, improve access to financial markets and make sure long-term care problems are adequately insured.— Viola Angelini, Agar Brugiavini and Guglielmo Weber

Date: 2009
References: Add references at CitEc
Citations: View citations in EconPapers (58)

Downloads: (external link)
http://hdl.handle.net/10.1111/j.1468-0327.2009.00227.x (application/pdf)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:ecpoli:v:24:y:2009:i:59:p:463-508.

Access Statistics for this article

Economic Policy is currently edited by Ghazala Azmat, Roberto Galbiati, Isabelle Mejean and Moritz Schularick

More articles in Economic Policy from CEPR, CESifo, Sciences Po Contact information at EDIRC., CES Contact information at EDIRC., MSH Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press ().