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What effect does increasing the retirement age have on the employment rate older women? Empirical evidence from retirement age hikes in Hungary during the 2000s

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  • Zsombor Cseres-Gergely

    (Institute of Economics, Center for Economic and Regional Studies, Hungarian Academy of Sciences)

Abstract

This paper provides empirical evidence on the effect of changing the retirement age on employment. Base on individual data from Hungary, a country where a number of hikes increased the retirement age between 1997 and 2009, this analysis benefits from substantial variation in pension eligibility during a relatively short time. It is based on a difference-in-difference approach and supported by independent variation in the age-based eligibility rule contributing to the causal identification of the effect. Results suggest that the effect of the changes in early retirement age is substantial, amounting to 5-7.4 percentage point increase in the 45 per cent employment rate at the retirement age for women. Changes in the normal retirement age do not seem to have such employment effect because increases in disability pension claims have counteracted them.

Suggested Citation

  • Zsombor Cseres-Gergely, 2014. "What effect does increasing the retirement age have on the employment rate older women? Empirical evidence from retirement age hikes in Hungary during the 2000s," Budapest Working Papers on the Labour Market 1403, Institute of Economics, Centre for Economic and Regional Studies.
    • Handle: RePEc:has:bworkp:1403
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    References listed on IDEAS

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    1. Zweimüller, Josef & Staubli, Stefan, 2011. "Does Raising the Retirement Age Increase Employment of Older Workers?," CEPR Discussion Papers 8510, C.E.P.R. Discussion Papers.
    2. Gábor Kátay & Benedek Nobilis, 2009. "Driving Forces Behind Changes in the Aggregate Labour Force Participation in Hungary," MNB Working Papers 2009/5, Magyar Nemzeti Bank (Central Bank of Hungary).
    3. Major, Klára & Varga, Gergely, 2013. "Parametrikus nyugdíjreformok és életciklus-munkakínálat [Parametric pension reforms and life-cycle labour supply]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(11), pages 1169-1207.
    4. Mastrobuoni, Giovanni, 2009. "Labor supply effects of the recent social security benefit cuts: Empirical estimates using cohort discontinuities," Journal of Public Economics, Elsevier, vol. 93(11-12), pages 1224-1233, December.
    5. Karoly Fazekas & Zsombor Cseres-Gergely & Agota Scharle (ed.), 2008. "The Hungarian Labour Market 2008," The Hungarian Labour Market Yearbooks, Institute of Economics, Centre for Economic and Regional Studies, number 2008, December.
    6. Péter Benczúr & Gábor Kátay & Áron Kiss, 2012. "Assessing changes of the Hungarian tax and transfer system: A general-equilibrium microsimulation approach," MNB Working Papers 2012/7, Magyar Nemzeti Bank (Central Bank of Hungary).
    7. Jonathan Cribb & Carl Emmerson & Gemma Tetlow, 2013. "Incentives, shocks or signals: labour supply effects of increasing the female state pension age in the UK," IFS Working Papers W13/03, Institute for Fiscal Studies.
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    Cited by:

    1. Cseres-Gergely, Zsombor, 2015. "A 2000-es évek magyarországi nyugdíjkorhatár-emeléseinek azonnali hatása az érintett nők munkavállalására [The effect raising the retirement age has on the employment rate of older women. Empirical," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(6), pages 652-673.
    2. Wojciech Hardy & Aneta Kielczewska & Piotr Lewandowski & Iga Magda, 2018. "Job retention among older workers in central and Eastern Europe," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 18(2), pages 69-94.

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    More about this item

    Keywords

    retirement age; older workers; employment;
    All these keywords.

    JEL classification:

    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • 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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