Early Retirement in the Government Sector in Egypt: Preferences, Determinants and Policy Implications

The objective of this study is to look at factors affecting the decision of early retirement for Egyptian government sector employees. The empirical analysis is based on a 2005 nationally representative sample of 3437 government sector workers, ranging in age between 50 and 57 years. The study’s main findings are: the age of 55 is shown to be the age of choice for early retirement for both men and women; women are more likely to retire earlier than men; good health status is associated with longer stay in the job; women are more educated than men; the level of education is not a determining factor for women, but it is for men; men without a university degree are more likely to retire earlier than others with a university degree; men plan to work after their early retirement; the presence of the working wife has a positive effect on her husband’s decision to retire early, yet a working husband discourages his wife to retire early. Meanwhile, the policy implications discussed are: timing of the announcement of the plans; the question of voluntary vs. compulsory early retirement plans; the potential outcome of excessive payoffs and curtailing adverse selection by targeting redundant employees and preserving the most productive; and the need for the government to provide early retirees with the necessary skills and training to face their post retirement years.