 Micro Modeling of Retirement Decisions in GermanyBörsch-Supan, Axel (), Simone Kohnz and Reinhold Schnabel No 2020, MEA discussion paper series from Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy Abstract: Early retirement in Germany is very costly and amplifies the burden which the German public pension system has to carry due to population aging. This paper shows that the German pension system provides strong incentives to retire early. The paper provides relatively robust econometric evidence for the strength of incentive effects on old age labor supply, using several specifications of incentive variables. The econometric estimates are used to simulate the individual responses to policy changes. The adjustment factors for early retirement introduced by the 1992 pension reform are estimated to increase the retirement age of men by about 1.5 years. This increase is almost the same as the effect from a shift in the “normal retirement†age from 65 to 67. Introducing (almost) fair adjustments (6% per year of delay) would increase the retirement age by about 2 years and 2 months. The effects are about half the size for women. JEL-codes: Z00 (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:mea:meawpa:02020 Ordering information: This working paper can be ordered from Access Statistics for this paper More papers in MEA discussion paper series from Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy, Amalienstraße 33, 80799 München, Germany. |
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