<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>Using high-frequency Italian administrative data, the author studies the heterogeneous effects of a reform raising the normal retirement age (NRA) from 60 years to 65 years for private-sector male employees. The analysis, based on a difference-in-differences (DD) method, shows that the NRA raise reduces pension benefit claims but does not lead to a one-to-one increase in the employment rate since workers also apply for more disability and unemployment benefits. Moreover, most of them simply retire without any benefit. The extent of the effects varies substantially across socio-economic groups, as individuals with poorer health, with lower occupational grades and lower pay levels are the most constrained by the reform, experiencing the highest delay in pension claims, increase in employment, and inactivity. All in all, this paper shows that raising the NRA could have unintended effects as it affects more negatively the most vulnerable in the labor market.</p>
</abstract>

Using high-frequency Italian administrative data, the author studies the heterogeneous effects of a reform raising the normal retirement age (NRA) from 60 years to 65 years for private-sector male employees. The analysis, based on a difference-in-differences (DD) method, shows that the NRA raise reduces pension benefit claims but does not lead to a one-to-one increase in the employment rate since workers also apply for more disability and unemployment benefits. Moreover, most of them simply retire without any benefit. The extent of the effects varies substantially across socio-economic groups, as individuals with poorer health, with lower occupational grades and lower pay levels are the most constrained by the reform, experiencing the highest delay in pension claims, increase in employment, and inactivity. All in all, this paper shows that raising the NRA could have unintended effects as it affects more negatively the most vulnerable in the labor market.

The unequal impact of raising the retirement age: Employment response and program substitution

Department of Economics and Statistics “Cognetti de Martiis”

University of Torino & LABORatorio R. Revelli

IZA Journal of Labor Economics

This work is licensed under the Creative Commons Attribution 4.0 International License.

Using high-frequency Italian administrative data, the author studies the heterogeneous effects of a reform raising the normal retirement age (NRA) from 60...

The unequal impact of raising the retirement age: Employment response and program substitution

Published Online: Sep 21, 2021

Page range: -

Accepted: Aug 09, 2021

DOI: https://doi.org/10.2478/izajole-2021-0003

Keywords
Retirement age, Labor supply, Disability benefit, Pension reform, Unemployment, Older workers, Socio-economic inequalities

© 2021 Chiara Ardito, published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

The unequal impact of raising the retirement age: Employment response and program substitution

Published Online: Sep 21, 2021

Page range: -

Accepted: Aug 09, 2021

DOI: https://doi.org/10.2478/izajole-2021-0003

KeywordsRetirement age, Labor supply, Disability benefit, Pension reform, Unemployment, Older workers, Socio-economic inequalities

© 2021 Chiara Ardito, published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Keywords
Retirement age, Labor supply, Disability benefit, Pension reform, Unemployment, Older workers, Socio-economic inequalities