Economics at your fingertips  

Impacts of the Availability of Old-Age Benefits on Exits from the Labour Market

Ga?ecka-Burdziak, Ewa () and Marek Góra ()
Additional contact information
Ga?ecka-Burdziak, Ewa: Warsaw School of Economics

Authors registered in the RePEc Author Service: Ewa Gałecka-Burdziak ()

No 9014, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Given human longevity, fertility, health and social developments, workers become inactive relatively early throughout Europe. This partially stems from older workers being pushed out of the labour market and from personal motivation to prefer benefits to wages. We focus on this latter effect and analyse whether workers would have stayed active had they not been tempted by the availability of the old-age benefits. We focus on Poland, a country severely experiencing the problem of population ageing. In 2013 persons 50+ accounted for 37% of the total population. Although they enjoy a relatively low unemployment rate, their participation and employment rates are very low: 34% and 32%, respectively. We analyse whether this is due to the discouraged worker effect. We identify the cyclical properties of activity and discouraged worker rates, and estimate a set of logistic regressions to identify the determinants of the exits from the labour market. Cyclical analysis indicates that the added worker effect prevails over the discouraged worker effect. The discouraged worker effect appears with a delay of a few quarters. The process is asymmetric for females. Workers often permanently leave the market. The availability of old-age benefits increases the probability of outflow from unemployment to inactivity, as do unemployment rate changes. If old-age benefits become the main source of income for the worker within the 1 year interval, they are 8 to 20 times more likely to leave the workforce compared to those who receive either unemployment benefits or social welfare benefits.

Keywords: discouraged workers; discouraged worker effect; exits from the labour market; unemployment outflow; inflow to inactivity; old-age benefits (search for similar items in EconPapers)
JEL-codes: J14 J22 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2015-04
New Economics Papers: this item is included in nep-age and nep-eur
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) (application/pdf)

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:

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 2020-08-09
Handle: RePEc:iza:izadps:dp9014