Trends in Employment and Social Security Incentives in the Spanish Pension System: 1980-2016
In this paper, we analyze the association between financial incentives and retirement decisions using aggregate data for over four decades in Spain. We calculate an implicit tax rate on remaining in employment for an additional year and examine its correlation with employment rates for older workers. The results suggest that financial incentives play a role in explaining the retirement patterns of both employed and unemployed workers.
We acknowledge financial support from Spanish ministry of economy projects ECO2014-52238-R and ECO2017-83668-R and helpful comments from the ISS group meeting participants and Alfonso Sanchez. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.