Wednesday, 4 January 2017

The impact of easy and early access to old-age benefits on exits from the labour market: a macro-micro analysis

an article by Ewa Gałecka-Burdziak (Warsaw School of Economics) and Marek Góra (Warsaw School of Economics and IZA) published in IZA Journal of European Labor Studies Volume 5 Article 18 (2016


We examine whether easy and early access to old-age benefits induce older workers to become inactive. We use Polish LFS data.

We find added worker effect prevailing over discouraged worker effect. The latter arises after a few quarters and is asymmetric.

Females permanently leave the workforce. More males leave the workforce in contractions than re-enter in expansions.

If old-age benefit becomes the main source of income, the worker (after 1 year) is 8 to 20 times more likely to exit the market than unemployment or social welfare beneficiaries. Our findings support higher retirement age – the age when workers become eligible for old-age benefits.

JEL classification: J14, J22

Full text (HTML)

No comments: