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Employment and substitution effects of raising the statutory retirement age in France

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  • Rabaté, Simon
  • Rochut, Julie

Abstract

Increasing the minimum retirement age is a widespread option chosen by policy makers to reduce spending in financially constrained public pension systems. Yet, the effectiveness of such a reform strongly depends on the ability of individuals to postpone their withdrawal from the labor force. In this paper, we study the immediate impact of the 2010 reform of the French pension system by carrying out a short-term evaluation on the increase of the statutory eligibility age from 60 to 61. We use a differences-in-differences methodology, comparing the trajectories from work to retirement for succeeding generations facing a different statutory age. Using a detailed social security administrative database, we provide a global assessment of the effects of the reform, accounting for the potential substitution effects from old-age insurance toward unemployment, sickness or disability insurance schemes. Our findings suggest that despite a sizable effect on the employment rate, the reform also strongly increased unemployment and disability rates.

Suggested Citation

  • Rabaté, Simon & Rochut, Julie, 2020. "Employment and substitution effects of raising the statutory retirement age in France," Journal of Pension Economics and Finance, Cambridge University Press, vol. 19(3), pages 293-308, July.
    • Handle: RePEc:cup:jpenef:v:19:y:2020:i:3:p:293-308_1
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    Cited by:

    1. Dolls, Mathias & Krolage, Carla, 2023. "‘Earned, not given’? The effect of lowering the full retirement age on retirement decisions," Journal of Public Economics, Elsevier, vol. 223(C).
    2. Rabaté, Simon & Tréguier, Julie, 2024. "Labour supply and survivor insurance in the Netherlands," Labour Economics, Elsevier, vol. 88(C).
    3. Simon Rabaté & Julie Tréguier, 2022. "Labor Supply Effects of Survivor Insurance: Evidence from Restricted Access to Survivor Benefits in the Netherlands," CPB Discussion Paper 437, CPB Netherlands Bureau for Economic Policy Analysis.
    4. Denis Fougère & Pierre Gouëdard, 2021. "The effects of financial incentives and disincentives on teachers' retirement decisions: Evidence from the 2003 French pension reform," Working Papers hal-03465859, HAL.
    5. Felder, Lars & Geyer, Johannes & Haan, Peter, 2024. "Early retirement for early starters - A well targeted policy for people with high job demand?," VfS Annual Conference 2024 (Berlin): Upcoming Labor Market Challenges 302369, Verein für Socialpolitik / German Economic Association.
    6. Ardito Chiara, 2021. "The unequal impact of raising the retirement age: Employment response and program substitution," IZA Journal of Labor Economics, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 10(1), pages 1-37, January.
    7. Antoine Bozio & Simon Rabaté & Maxime Tô & Julie Tréguier, 2023. "Financial Incentives and Labor Force Participation of Older Workers: Evidence from France," NBER Chapters, in: Social Security Programs and Retirement around the World: The Effects of Reforms on Retirement Behavior, National Bureau of Economic Research, Inc.
    8. Johan Saeverud, 2024. "The Impact Of Social Security Eligibility And Pension Wealth On Retirement," CEBI working paper series 24-05, University of Copenhagen. Department of Economics. The Center for Economic Behavior and Inequality (CEBI).

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