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Labor Market and Distributional Effects of an Increase in the Retirement Age

Johannes Geyer (), Peter Haan, Anna Hammerschmid and Michael Peters

No 1741, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: We evaluate the labor market and distributional effects of an increase in the early retirement age (ERA) from 60 to 63 for women. We use a regression discontinuity design which exploits the immediate increase in the ERA between women born in 1951 and 1952. The analysis is based on the German micro census which includes about 370,000 households per year. We focus on heterogeneous labor market effects on the individual and on the household level and we study the distributional implications using net household income. In this respect we extend the previous literature which mainly studied employment effects on the individual level. Our results show sizable labor market effects which strongly differ by subgroups. We document larger employment effects for women who cannot rely on other income on the household level, e.g. women with a low income partner. The distributional analysis shows on average no significant effects on female or household income. This result holds as well for heterogeneous groups: Even for the most vulnerable groups, such as single women, women without higher education, or low partner income, we do not find significant reductions in income. One reason for this result is program substitution.

Keywords: retirement age; pension reform; labor supply; early retirement; distributional effects; spillover effects; household (search for similar items in EconPapers)
JEL-codes: J14 J18 J22 J26 H31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-age, nep-eur, nep-hea, nep-knm and nep-pbe
Date: 2018
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Related works:
Working Paper: Labor Market and Distributional Effects of an Increase in the Retirement Age (2018) Downloads
Working Paper: Labor Market and Distributional Effects of an Increase in the Retirement Age (2018) Downloads
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