Signals matter? Large retirement responses to limited financial incentives

Cribb, Jonathan; Emmerson, Carl; Tetlow, Gemma

doi:10.1016/j.labeco.2016.09.005

Cited by 98 publications

(150 citation statements)

References 27 publications

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“…Since 2010, the state pension age for women has risen above 60 (see Cribb et al 2016), but we keep the upper age bound fixed so as to limit compositional changes in the sample over time The lower age bound is 16, or 20 if in full-time education and living at home. Of course participation in higher education has increased over the period, which does induce some compositional changes in the workforce over time for the youngest adults.…”

Section: The Labour Market and Household Earningsmentioning

confidence: 99%

Two decades of income inequality in Britain: the role of wages, household earnings and redistribution

Belfield¹,

Blundell²,

Cribb³

et al. 2017

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We study earnings and income inequality in Britain over the past two decades, including the period of relatively "inclusive" growth from 1997-2004 and the Great Recession. We focus on the middle 90%, where trends have contrasted strongly with the "new inequality" at the very top. Household earnings inequality has risen, driven by male earnings -although a 'catch-up' of female earnings did hold down individual earnings inequality and reduce within-household inequality. Nevertheless, net household income inequality fell due to deliberate increases in redistribution, the tax and transfer system's insurance role during the Great Recession, falling household worklessness, and rising pensioner incomes.

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Section: The Labour Market and Household Earningsmentioning

confidence: 99%

Two decades of income inequality in Britain: the role of wages, household earnings and redistribution

Belfield¹,

Blundell²,

Cribb³

et al. 2017

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“…This section provides some key details of these benefits and the relevant reforms; for a more detailed discussion, see Banks, Blundell, Bozio, and Emmerson (2012). 3 These benefits are intended for those whose health means that they are not (currently) able to carry out paid work. While individuals do need to have made a contribution to disability insurance through a payroll tax in order to be eligible for benefits, the link from the amount paid to the disability benefits received is 3 Other substantial reforms to disability benefits in the United Kingdom include: the introduction of Invalidity Benefit in 1971; the introduction of statutory sick pay in 1983; a tightening of the contribution requirements, an intended tightening of the health test (and renaming it the "Personal Capability Assessment," PCA), and means-testing receipt of contributory Incapacity Benefit against an individual's private pension income in 2000; and the time-limiting of receipt of contributory Employment and Support Allowance for those in the work-related activities group to one year in 2012.…”

Section: The Uk Disability Reformsmentioning

confidence: 99%

Disability Benefit Receipt and Reform: Reconciling Trends in the United Kingdom

Banks

Blundell

Emmerson

2015

Journal of Economic Perspectives

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The UK has enacted a number of reforms to the structure of disability benefits that has made it a major case study for other countries thinking of reform. The introduction of Incapacity Benefit in 1995 coincided with a strong decline in disability benefit expenditure, reversing previous sharp increases. From 2008 the replacement of Incapacity Benefit with Employment and Support Allowance was intended to reduce spending further. We bring together administrative and survey data over the period and highlight key differences in receipt of disability benefits by age, sex, and health. These disability benefit reforms and the trends in receipt are also put into the context of broader trends in health and employment by education and sex. We document a growing proportion of claimants in any age group with mental and behavioral disorders as their principal health condition. We also show the decline in the number of older working age men receiving disability benefits to have been partially offset by growth in the number of younger women receiving these benefits. We speculate on the impact of disability reforms on employment.

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“…This increases the age at which women can (and in the vast majority of cases do) receive a state pension although it does not, at least overall, lead to an obvious change in financial incentives to be in paid work because there is no requirement to retire in order to claim a state pension and no ability to draw a state pension before the state pension age. Exploiting the fact that the state pension age has been increased gradually -and therefore in any time period there is variation in the state pension age between women born not that far apart -Cribb, Emmerson and Tetlow (2016) find that increasing this age led to a 6.3 percentage point increase in the rate of employment between the old and new state pension age. Descriptive evidence on this -using the same data as utilised by Cribb et al -is presented in Figure 3.3 which shows the employment rate by single year of age among women aged 56 to 63 over time.…”

Section: Trends In Employment: a Birth Cohort Analysismentioning

confidence: 95%

“…The state pension ages of men and women are then due to be increased together, so that they reach age 66 in October 2020. Cribb, Emmerson and Tetlow (2016) showed that the rise in the female state pension age from 60 to 62, which occurred between April 2010 and April 2014, boosted employment rates among women aged 60 and 61 by 6.3 percentage points. Some descriptive evidence of this is provided in Section 3 below.…”

Section: State Pensionsmentioning

confidence: 99%

Long-run Trends in the Economic Activity of Older People in the UK

Banks

Emmerson

Tetlow

2018

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We document employment rates of older men and women in the UK over the last forty years. In both cases growth in employment since the mid 1990s has been stronger than for younger age groups. On average, older men are still less likely to be in work than they were in the mid 1970s although this is not true for those with low education. We highlight issues with using years of schooling as a measure of educational achievement for analysing labour market trends at older ages, not least because a large proportion of men who left school at young ages without any formal qualifications, have subsequently acquired some.Reforms -such as the abolition of the earnings test and rises in the female State Pension Age, have pushed up employment rates. But other factors -such as the shift from defined benefit to defined contribution pensions being offered by private sector employers and the growth in employment rates at younger ages among successive cohorts of women -are also important. We discuss the role of other cohort and economy-wide trends, highlighting that the proportion of older men and women employed in professional, managerial and technical occupations has been particularly strong.

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Signals matter? Large retirement responses to limited financial incentives

Cited by 98 publications

References 27 publications

Two decades of income inequality in Britain: the role of wages, household earnings and redistribution

Two decades of income inequality in Britain: the role of wages, household earnings and redistribution

Disability Benefit Receipt and Reform: Reconciling Trends in the United Kingdom

Long-run Trends in the Economic Activity of Older People in the UK

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