Does raising the retirement age increase employment of older workers?

Stefan Staubli and Josef Zweimüller ()

No 20, ECON - Working Papers from Department of Economics - University of Zurich

Abstract: Two pension reforms in Austria increased the early retirement age from 60 to 62 for men and from 55 to 58.25 for women. The reforms reduced early retirement by 18.9 percentage points among affected men aged 60-62 and by 22.3 percentage points among affected women aged 55-58.25. The associated increase in employment was merely 6.8 percentage points among men and 10.1 percentage points among women. The reforms had large spillover effects to the unemployment insurance program but negligible effects on disability insurance claims. Specifically, unemployment increased by roughly 10 percentage points both among men and women. Spillover effects had substantial fiscal implications. Absent spillover effects, the reduction of net government expenditures would have amounted to 264 million Euros per year. Due to higher unemployment insurance claims and associated foregone income tax revenues the actual reduction was only 148 million Euros. High-wage and healthy workers carried the bulk of the fall in net government expenditures. Low-wage and less healthy workers generated much less government savings as they either continue to retire early via disability pensions or bridge the gap to regular retirement by drawing unemployment benefits.

Keywords: Retirement age; policy reform; labor supply; disability; unemployment (search for similar items in EconPapers)
JEL-codes: J14 J26 (search for similar items in EconPapers)
Date: 2011-07, Revised 2012-05
New Economics Papers: this item is included in nep-age, nep-lab and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

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Related works:
Working Paper: Does Raising the Retirement Age increase Employment of Older Workers? (2012)
Working Paper: Does Raising the Retirement Age Increase Employment of Older Workers? (2011)
Working Paper: Does Raising the Retirement Age Increase Employment of Older Workers? (2011)
Working Paper: Does Raising the Retirement Age Increase Employment of Older Workers? (2011)
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