Pension incentives and early retirement

Engels, Barbara; Geyer, Johannes; Haan, Peter

doi:10.1016/j.labeco.2017.05.006

Cited by 59 publications

(79 citation statements)

References 26 publications

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“…Generally, there is a strong interdependence between unemployment bene ts and pensions for older individuals. As documented in Grogger and Wunsch (2012), Giesecke and Kind (2013) and Engels et al (2016), some older individuals use unemployment bene ts as a bridge into retirement. In particular, there is evidence that unemployed individuals exhaust their full entitlement period for unemployment bene ts before entering retirement.…”

Section: Disability Pension Unemployment Insurance and Inactivitymentioning

confidence: 97%

“…Similar to other studies, we exploit cohort-speci c variation in incentives to retire (e.g., Mastrobuoni, 2009;Hanel and Riphahn, 2012;Cribb et al, 2014;Lalive and Staubli, 2014;Atalay and Barrett, 2015;Manoli and Weber, 2016;Engels et al, 2016). In contrast to previous studies, the reform we analyze is a large one-time change of pension rules.…”

Section: Introductionmentioning

confidence: 99%

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Closing Routes to Retirement: How Do People Respond?

Geyer

Welteke

2017

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. We present quasi-experimental evidence on the employment e ects of an unprecedented large increase in the early retirement age (ERA). Raising the ERA has the potential to extend contribution periods and to reduce the number of pension bene ciaries at the same time, if employment exits are successfully delayed. However, workers may not be able to work longer or may choose other social support programs as exit routes from employment. We study the e ects of the ERA increase on employment and potential program substitution in a regression-discontinuity framework. Germany abolished an important early retirement program for women born after 1951, e ectively raising the ERA for women by three years. We analyze the e ects of this huge increase on employment, unemployment, disability pensions, and inactivity rates. Our results suggest that the reform increased both employment and unemployment rates of women age 60 and over. However, we do not nd evidence for active program substitution from employment into alternative social support programs. Instead employed women remained employed and unemployed women remained unemployed. The results suggest an increase in inequality within the a ected cohorts. Terms of use: Documents in

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Section: Disability Pension Unemployment Insurance and Inactivitymentioning

confidence: 97%

Section: Introductionmentioning

confidence: 99%

Closing Routes to Retirement: How Do People Respond?

Geyer

Welteke

2017

SSRN Journal

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“…However, especially in the 1980s and 1990s and also today, many Germans retire early (Börsch-Supan and Jürges, 2012); others reduce their working hours, for example, to take care of their grandchildren or provide long-term care for their parents (Schmitz and Westphal, 2017). Finally, the stable permanent income stream from age 70 until death may be explained by the fact that our income measure includes primarily statutory pensions, employerbased pensions and private pensions (Geyer and Steiner, 2014;Kluth and Gasche, 2016;Engels et al, 2017).…”

Section: Lifecycle Income Pathsmentioning

confidence: 99%

Long-Term Health Insurance: Theory Meets Evidence

et al. 2020

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To insure policyholders against contemporaneous health expenditure shocks and future reclassification risk, long-term health insurance constitutes an alternative to community-rated shortterm contracts with an individual mandate. Relying on unique claims panel data from a large private insurer in Germany, we study a real-world long-term health insurance application with a life-cycle perspective. We show that German long-term health insurance (GLTHI) achieves substantial welfare gains compared to a series of risk-rated short-term contracts. Although, by its simple design, the premium setting of GLTHI contract departs significantly from the optimal dynamic contract, surprisingly we only find modest welfare differences between the two. Finally, we conduct counterfactual policy experiments to illustrate the welfare consequences of integrating GLTHI into a system with a "Medicare-like" public insurance that covers people above 65.

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“…For the United States, Mastrobuoni (2009) shows that for an increase of 2 months in NRA, people respond by delaying the claim of their benefits by one month (relative change of about 50%). In Austria (Staubli and Zweimüller, 2013) and in Germany (Engels, Geyer and Haan, 2017), the responsiveness to an increase in NRA is heterogeneous, depending on health status and wage. Healthy high-wage workers tend to remain employed longer, while poor health or low-wage workers bridge the gap by using unemployment insurance.…”

Section: Ii2 Pension Reforms Financial Incentives and Behavioural mentioning

confidence: 99%

“…Furthermore, as pointed out by Engels, Geyer and Haan (2017), unemployment or disability can be a strategic decision before retiring, used as a bridge into retirement. Hence, the analysis focuses only on individuals who were active before retirement (unemployed, disabled, inactive or progressive/partial retirement is not considered).…”

Section: Iii1 the Datamentioning

confidence: 99%

Time inconsistency and delayed retirement decision: the French pension bonus

Briand

2019

Applied Economics

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With the increase in life expectancy and demographic shocks, several public policies in the last decades aim to encourage individuals to postpone retirement. One of them, the pension bonus, gives an increased pension if individuals retire beyond their Full Retirement Age. Previous ex post analyses found that the responsiveness to this type of financial incentives, which encourage to postpone retirement, is heterogeneous among agents and that the global effect is rather limited. Deriving from previous research in Behavioural Economics, this article analyses the impact of time inconsistency in the decision to delay retirement to get the bonus. Using public national survey data, short-term and long-term impatience are measured with questions on retiring motivations. After controlling for the endogeneity of the bonus knowledge, econometric results show that time-inconsistent agents are less likely to retire with the bonus.

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Pension incentives and early retirement

Cited by 59 publications

References 26 publications

Closing Routes to Retirement: How Do People Respond?

Closing Routes to Retirement: How Do People Respond?

Long-Term Health Insurance: Theory Meets Evidence

Time inconsistency and delayed retirement decision: the French pension bonus

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