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Retirement behaviour and retirement incentives in Spain

Author

Listed:
  • Raquel Vegas

    (FEDEA)

  • Isabel Argimón

    (Banco de España)

  • Marta Botella

    (Banco de España)

  • Clara I. González

    (FEDEA)

Abstract

In this paper we analyse the role that Social Security wealth and incentives play in the transition to retirement in Spain. We use the labour records and other relevant information contained in a newly released database [Muestra Continua de Vidas Laborales (2006)] to construct incentive measures stemming from the Social Security provisions in relation to retiring at old age and investigate the role played by such incentives and by other socio-economic variables on the retirement hazard. We compute the effects of the reform that took place in 2002, which made the requirements to access a pension stricter in general. We carry out a dynamic reduced-form analysis of the retirement decision using a duration model. Our results show that both the pension wealth and substitution effects have a significant role on retirement decisions, but that the latter has less relevance since the reform introduced in 2002.

Suggested Citation

  • Raquel Vegas & Isabel Argimón & Marta Botella & Clara I. González, 2009. "Retirement behaviour and retirement incentives in Spain," Working Papers 0913, Banco de España.
    • Handle: RePEc:bde:wpaper:0913
    as

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    File URL: http://www.bde.es/f/webbde/SES/Secciones/Publicaciones/PublicacionesSeriadas/DocumentosTrabajo/09/Fic/dt0913e.pdf
    File Function: First version, August 2009
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    Citations

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    Cited by:

    1. Díaz-Giménez, Javier & Díaz-Saavedra, Julián, 2017. "The future of Spanish pensions," Journal of Pension Economics and Finance, Cambridge University Press, vol. 16(2), pages 233-265, April.
    2. Julian Diaz Saavedra, 2013. "Age-dependent Taxation, Retirement Behavior, and Work Hours Over the Life Cycle," ThE Papers 13/09, Department of Economic Theory and Economic History of the University of Granada..
    3. Carmen Petrovici & Jörg Neugschwender, 2014. "Who can (still) afford to retire early? Cross-country comparison of incomes of senior workers and young retirees using LIS data for 2007 & 2010," LIS Working papers 608, LIS Cross-National Data Center in Luxembourg.
    4. Isabel Cairó-Blanco, 2010. "An empirical analysis of retirement behaviour in Spain: partial versus full retirement," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 1(3), pages 325-356, July.
    5. F. J. Fernández-Díaz & C. Patxot & G. Souto, 2013. "DYPES: A Microsimulation model for the Spanish retirement pension system," Working Papers 2013-06, FEDEA.
    6. Sergi Jiménez Martín & Judit Vall Castello, 2009. "Business Cycle Effects on Labour Force Transitions for Older People in Spain," Working Papers 2009-25, FEDEA.
    7. Julian Diaz Saavedra, 2014. "Early Retirement, Social Security, and Output Gap," ThE Papers 14/01, Department of Economic Theory and Economic History of the University of Granada..
    8. Julián Díaz-Saavedra, 2017. "Tax and transfer programs, retirement behavior, and work hours over the life cycle," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 20(1), pages 64-85, January.

    More about this item

    Keywords

    older workers employment; retirement; public pensions;
    All these keywords.

    JEL classification:

    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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