Health Status, Disability Insurance, and Incentives to Exit the Labor Force in Italy: Evidence from SHARE
Chapter in NBER book Social Security Programs and Retirement Around the World: Disability Insurance Programs and Retirement (2016), David A. Wise, editor (p. 411 - 454)
This chapter analyzes the retirement behavior of Italian employees by considering different pathways to retirement such as old age, early retirement and disability insurance. In particular, we focus on the role played by health conditions and socio-economic factors beyond and above the financial incentives associated to each pathway. These incentives are measured by the option value of working an extra year vis-à-vis leaving the labor force through one of the alternative routes. The Italian experience has been characterized for many years by a relevant early retirement option, but a renewed interest by workers for disability pensions could stem from the recent pension reforms, which introduced tighter eligibility criteria for early exits.
The financial incentives of the different pathways are used in a dynamic way, controlling for health conditions measured by an overall health index. The econometric estimates are based on the SHARE data: we find that the recent reforms have induced some delay in the retirement decision and that health has important effects on the decision of working in old age.
Document Object Identifier (DOI): 10.7208/chicago/9780226262604.003.0010
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