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Employment Duration and Shifts into Retirement in the EU

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  • Ted Aranki & Corrado Macchiarelli

Abstract

The decision to cease working is traditionally influenced by a wide set of socio-economic and environmental variables. In this paper, we study transitions out of work for 26 EU countries over the period 2004-2009 in order to investigate the determinants of retirement based on the Eurostat Survey on Income and Living Conditions (EU-SILC). Applying standard survivor analysis tools to describe exits into retirement, we do not find any significant differences in the patterns into retirement between the average euro area and EU non-euro area countries. Moreover, we find that shifts into retirement have increased during the onset of the 2009 economic and financial crisis. Income, together with flexible working arrangements, is found to be important as regards early retirement decisions, compared to retiring beyond the legal retirement age. Finally, we show that institutional measures (such as, state/health benefits, minimum retirement age) could not be sufficient alone if individuals withdraw earlier from the labour market due to a weakening of their health. Especially, these latter results are of importance for structural and macroeconomic policy, for instance, in increasing the employment of both people and hours worked against the background of population ageing.

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  • Ted Aranki & Corrado Macchiarelli, 2013. "Employment Duration and Shifts into Retirement in the EU," Europe in Question Discussion Paper Series of the London School of Economics (LEQs) 8, London School of Economics / European Institute.
    • Handle: RePEc:erp:leqsxx:p0058
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    2. Nicolas Sirven & Thomas Barnay, 2017. "Expectations, loss aversion and retirement decisions in the context of the 2009 crisis in Europe," International Journal of Manpower, Emerald Group Publishing Limited, vol. 38(1), pages 25-44, April.
    3. Ivleva, Galina (Ивлева, Галина) & Koroteeva, Oksana (Коротеева, Оксана), 2015. "The Mechanisms of Public Control Over the Activities of Public Authorities in Modern Russia [Механизмы Общественного Контроля За Деятельностью Органов Государственной Власти В Современной России]," Published Papers mn66, Russian Presidential Academy of National Economy and Public Administration.
    4. Haan, Peter & Tolan, Songül, 2019. "Labor supply and fiscal effects of partial retirement – The role of entry age and the timing of pension benefits," The Journal of the Economics of Ageing, Elsevier, vol. 14(C).
    5. Melanie Ward-Warmedinger & Corrado Macchiarelli, 2013. "Transitions in labour market status in the European Union," Europe in Question Discussion Paper Series of the London School of Economics (LEQs) 9, London School of Economics / European Institute.
    6. Costa-Font, Joan & Vilaplana-Prieto, Cristina, 2023. "Caregiving subsidies and spousal early retirement intentions," Journal of Pension Economics and Finance, Cambridge University Press, vol. 22(4), pages 550-589, October.
    7. Justine Bondoux & Thomas Barnay & Thomas Renaud & Florence Jusot, 2021. "How Does Disability Affect Income? An Empirical Study on Older European Workers," Erudite Working Paper 2021-05, Erudite.
    8. Melanie Ward-Warmedinger & Corrado Macchiarelli, 2014. "Transitions in labour market status in EU labour markets," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-25, December.
    9. Jacques Wels, 2016. "The Statistical Analysis of End of Working Life: Methodological and Sociological Issues Raised by the Average Effective Age of Retirement," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 129(1), pages 291-315, October.

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    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • 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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