Economics at your fingertips  

Did Soviet Elderly Employment Respond to Financial Incentives? Evidence from Pension Reforms

Olga Malkova

No 12790, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This study answers the open question of whether workers respond to financial incentives in a command economy. To do this, I evaluate pension reforms in Soviet Russia in 1964 and 1969 that allowed pensioners to receive a greater share of their pensions if they worked, resulting in a progressive elimination of benefit reduction rates. Variation in group eligibility and variation in benefit reduction rates in eastern and western regions allow for the use of several difference-in-differences frameworks. I collect and digitize novel data from the Soviet archives on pensioner employment, constructing the first database of the Soviet old-age labor market. I find that Soviet pensioners are responsive to financial incentives. By 1969, after the benefit reduction rate fell from an average of 47.8 to 24.1 percent, pensioner employment rates rose by 5.7 percentage points, representing a 47 percent increase. Finally, I provide illustrative estimates of the employment elasticity with respect to the average net-of-tax rate that range from 0.6 to 1.4.

Keywords: pension; retirement; employment; Soviet economy (search for similar items in EconPapers)
JEL-codes: H55 J18 J26 (search for similar items in EconPapers)
Pages: 76 pages
Date: 2019-11
New Economics Papers: this item is included in nep-age, nep-cis, nep-lma and nep-tra
References: View references in EconPapers View complete reference list from CitEc

Published - published in: Journal of Public Economics, 2020, 182, 104111

Downloads: (external link) (application/pdf)

Related works:
Journal Article: Did Soviet elderly employment respond to financial incentives? Evidence from pension reforms (2020) Downloads
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:

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().

Page updated 2024-06-12
Handle: RePEc:iza:izadps:dp12790