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Culture, financial constraints, and retirement decision

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  • Cottier, Lionel

Abstract

This paper investigates the interaction between cultural effects and financial constraints. I study how culture affects male labor supply near retirement before and after reforms that introduced early access to pension benefits. Variation in the cultural dimension arises from different cultural groups across state borders in Switzerland. Results show that the impact of culture over time follows changes in financial constraints resulting from the reforms. While individuals from the two cultural groups had identical labor force participation rates near retirement in 1970, they differ by almost three percent in 2000. I argue that the introduction of early access to pension benefits in the 1980s and 1990s loosened financial constraints and gave more room for culture to affect labor force participation.

Suggested Citation

  • Cottier, Lionel, 2018. "Culture, financial constraints, and retirement decision," Labour Economics, Elsevier, vol. 53(C), pages 128-145.
    • Handle: RePEc:eee:labeco:v:53:y:2018:i:c:p:128-145
    DOI: 10.1016/j.labeco.2018.04.008
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    More about this item

    Keywords

    Culture; Labor supply; Financial constraints; Work attitudes; Retirement; Social norms;
    All these keywords.

    JEL classification:

    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • Z10 - Other Special Topics - - Cultural Economics - - - General

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