The Effects of the Early Retirement Age on Retirement Decisions
We present quasi-experimental evidence on the effects of increasing the Early Retirement Age (ERA) on older workers' retirement decisions. The analysis is based on social security reforms in Austria in 2000 and 2004, and administrative data allows us to distinguish between pension claims and job exits. Using a Regression Kink Design, we estimate that, within a birth cohort, a 1.0-year increase in the ERA leads to a 0.4-year increase in the average job exiting age and a 0.5-year increase in the average pension claiming age. When the ERA increases, many older workers remain in their jobs longer.
We are grateful to many conference and seminar participants for insightful comments and suggestions. Day Manoli acknowledges funding from the Social Security Administration through the NBER RRC. This project received funding from the Austrian Science Fund (NRN Labor Economics and the Welfare State). The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
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