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The effect of old-age insurance on male retirement : evidence from historical cross-country data

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  • Richard L. Johnson

Abstract

I examine the effect of Old-Age Insurance systems on the labour supply of older men. Male retirement ages are crucial to the solvency of OAI systems. Historical data on participation rates and OAI rules in thirteen developed countries show rapid falls in participation among men aged 60-4 after pensions were extended to them. I estimate participation elasticities of -0.06 with respect to replacement rates and 0.19 to the net-of-tax wage. It does not appear that endogenous OAI changes bias the regression coefficients. The growth of OAI explains about 11 percent of the reduction in participation of men aged 60-4 since 1920; greater wealth probably explains most of the remainder.

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  • Richard L. Johnson, 2000. "The effect of old-age insurance on male retirement : evidence from historical cross-country data," Research Working Paper RWP 00-09, Federal Reserve Bank of Kansas City.
    • Handle: RePEc:fip:fedkrw:rwp00-09
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    Cited by:

    1. Bernardo Lanza Queiroz, 2007. "The determinants of male retirement in urban Brazil," Nova Economia, Economics Department, Universidade Federal de Minas Gerais (Brazil), vol. 17(1), pages 11-36, January-A.
    2. Ning, Manxiu & Gong, Jinquan & Zheng, Xuhui & Zhuang, Jun, 2016. "Does New Rural Pension Scheme decrease elderly labor supply? Evidence from CHARLS," China Economic Review, Elsevier, vol. 41(C), pages 315-330.
    3. Justina A. V. Fischer & Alfonso Sousa-Poza, 2009. "The Effect of Pension Generosity on Early Retirement: A Microdata Analysis for Europe from 1967 to 2004," Diskussionspapiere aus dem Institut für Volkswirtschaftslehre der Universität Hohenheim 311/2009, Department of Economics, University of Hohenheim, Germany.
    4. Tryggvi Thor Herbertsson, 2001. "Shrinking Labour Forces and Early Retirement," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 2(4), pages 31-37, October.
    5. Jim Been & Olaf Vliet, 2017. "Early Retirement across Europe. Does Non-Standard Employment Increase Participation of Older Workers?," Kyklos, Wiley Blackwell, vol. 70(2), pages 163-188, May.
    6. Richard Disney, 2001. "Europe: Is There an Aging Crisis or is it a Public Pension Problem?," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 2(4), pages 25-30, February.
    7. Richard L. Johnson, 2001. "Effects of old-age insurance on female retirement : evidence from cross-country time-series data," Research Working Paper RWP 01-08, Federal Reserve Bank of Kansas City.

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    Keywords

    Insurance; Social security; Retirement;
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