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The Effectiveness of Government Intervention to Promote Elderly Employment: Evidence from Elderly Employment Stabilization Law

Ayako Kondo () and Hitoshi Shigeoka ()

No e061, Working Papers from Tokyo Center for Economic Research

Abstract: Since the pension eligibility age started to rise in 2001, there had been a gap between the eligibility age for full pension benefits and the prevailing retirement age in Japan. To fill the gap, the government of Japan revised the Elderly Employment Stabilization Law (EESL): starting from 2006, employers are legally obliged to introduce a system to continue employment up to the pension eligibility age. This paper examines the effect of this legal enforcement on elderly men's labor supply and employment status, by comparing the affected cohorts and cohorts a few years older than them. We find that the EESL revision actually increases the employment rate of men in the affected cohorts in their early 60s, and the effect is larger for employees of the large firms. Also, the increase in elderly workers who stay in the same employer does not replace elderly workers who switch employers, suggesting that the revised EESL does not hinder elderly worker's mobility.

Pages: 42 pages
Date: 2013-10
New Economics Papers: this item is included in nep-age and nep-law
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