Reforms of an Early Retirement Pathway in Germany and Their Labor Market Effects

Arbeitspapier

We investigate the unemployment pathway to retirement in Germany and study the causal effects of two early retirement reforms. Reform 1 (NRA) increased normal retirement age stepwise from 60 to 65. Simultaneously, it became possible to use early retirement with benefit discounts. Reform 2 (ERA) increased the age of early retirement stepwise from 60 to 63. We investigate behavioral responses to the reforms using administrative data and difference-indifferences strategies. We find strong and significant causal effects of both reforms. Individuals postponed retirement, stayed employed longer, postponed unemployment, and shifted to alternative pathways into retirement. The overall use of the retirement system declined by about 1.5 and 2 months per person after each of the two reforms. Individuals with low pension wealth and those who were affected immediately by the reform responded more strongly.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 9461

Classification and Topics

• Classification: Wirtschaft ; Social Security and Public Pensions ; Retirement; Retirement Policies ; Single Equation Models; Single Variables: Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions
• Subject: early retirement ; program substitution ; labor force participation ; causal effects ; difference-in-differences ; effect heterogeneity

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Riphahn, Regina T. ; Schrader, Rebecca
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/249006
• Last update: 10.03.2025, 11:42 AM CET