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Microeconometric Analysis of the Retirement Decision: Germany

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  • Pablo Antolín
  • Stefano Scarpetta

Abstract

This paper analyses the determinants of the retirement decision in Germany using microdata from the German Socio-Economic Panel over the period 1985-1995. Non-parametric and semi-parametric techniques have been used to describe the exit to retirement. Non-parametric estimates suggest that the incentive structure generated by the different social security schemes play a powerful role in the individual retirement decision. The semi-parametric analysis is conducted using a piece-wise constant hazard model with multiple destinations (i.e. disability scheme and old-age pension scheme) and time-varying covariates. Socio-demographic factors have a strong impact on the retirement decision. Moreover, poor health contributes to early withdrawals from the labour market, especially in the case of disability retirement. Financial incentives offered in the pension system are also powerful in shaping the age profile of retirement. In particular, we used the pension wealth and an estimate of the ... Ce document analyse les facteurs qui déterminent la décision de partir à la retraite, en Allemagne, en utilisant les micro-données tirées de l’Enquête Socio-Economique durant la période 1985-95. Des techniques d’analyse non-paramétrique et semi-paramétrique ont été utilisées pour décrire le processus de départ à la retraite. Les estimations non-paramétriques suggèrent que les incitations produites par les différents éléments du système de sécurité sociale jouent un rôle très important dans la decision individuelle de départ à la retraite.L’analyse semi-paramëtrique est menée en utilisant un modèle à risqué constant “piece-wise” à destinations multiples (pensions d’invalidité et de vieillesse) et des variables explicatives variant dans le temps. Les facteurs socio-démographiques ont un impact important sur la décision de départ à la retraite. De plus une mauvaise santé incite à un départ anticipé à la retraite, surtout dans le cadre d’une pension d’invalidité. Les incitations ...

Suggested Citation

  • Pablo Antolín & Stefano Scarpetta, 1998. "Microeconometric Analysis of the Retirement Decision: Germany," OECD Economics Department Working Papers 204, OECD Publishing.
    • Handle: RePEc:oec:ecoaaa:204-en
    DOI: 10.1787/572650601656
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    Cited by:

    1. Jennifer Roberts & Nigel Rice & Andrew M. Jones, 2008. "Early retirement and inequality in Britain and Germany: How important is health?," Working Papers 2008012, The University of Sheffield, Department of Economics, revised Nov 2008.
    2. Brown, Alessio J.G. & Fraikin, Anne-Lore, 2022. "The old-age pension household replacement rate in Belgium," The Journal of the Economics of Ageing, Elsevier, vol. 23(C).
    3. Monika Bütler & Olivia Huguenin & Federica Teppa, 2005. "Why Forcing People to Save Retirement May Backfire," Cahiers de Recherches Economiques du Département d'économie 05.05, Université de Lausanne, Faculté des HEC, Département d’économie.
    4. Marjan, MAES, 2008. "Does the dismantlement of early retirement schemes increase unemployment in Belgium ?," Discussion Papers (ECON - Département des Sciences Economiques) 2008041, Université catholique de Louvain, Département des Sciences Economiques.
    5. Malene Kallestrup-Lamb & Anders Bredahl Kock & Johannes Tang Kristensen, 2016. "Lassoing the Determinants of Retirement," Econometric Reviews, Taylor & Francis Journals, vol. 35(8-10), pages 1522-1561, December.
    6. Malene Kallestrup-Lamb, 2011. "The Role of the Spouse in Early Retirement Decisions for Older Workers," CREATES Research Papers 2011-38, Department of Economics and Business Economics, Aarhus University.
    7. Piekkola, Hannu & Deschryvere, Matthias, 2004. "Retirement Decisions and Option Values: Their Application Regarding Finland," Discussion Papers 951, The Research Institute of the Finnish Economy.
    8. Oscar Molina & Fabian Soria, 2006. "Factores Determinantes de la Probabilidad de Afiliación al Sistema de Pensiones en Bolivia," Development Research Working Paper Series 02/2006, Institute for Advanced Development Studies.
    9. Sašo Polanec & Aleš Ahčan & Miroslav Verbič, 2013. "Retirement decisions in transition: microeconometric evidence from Slovenia," Post-Communist Economies, Taylor & Francis Journals, vol. 25(1), pages 99-118, March.
    10. Pascual-Saez, Marta & Cantarero-Prieto, David & Pires Manso, José R., 2020. "Does population ageing affect savings in Europe?," Journal of Policy Modeling, Elsevier, vol. 42(2), pages 291-306.
    11. Barbara Berkel, 2006. "Retirement Age and Preretirement in German Administrative Data," MEA discussion paper series 06107, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
    12. Hupfeld, Stefan, 2009. "Rich and healthy--better than poor and sick?: An empirical analysis of income, health, and the duration of the pension benefit spell," Journal of Health Economics, Elsevier, vol. 28(2), pages 427-443, March.
    13. Monika Bütler & Olivia Huguenin & Federica Teppa, 2005. "Why Forcing People to Save for Retirement May Backfire," University of St. Gallen Department of Economics working paper series 2005 2005-09, Department of Economics, University of St. Gallen.
    14. Marjan, MAES, 2008. "Financial and redistributive impact of reforming the old-age pension system in Belgium," Discussion Papers (ECON - Département des Sciences Economiques) 2008040, Université catholique de Louvain, Département des Sciences Economiques.
    15. Hakola, Tuulia & Uusitalo, Roope, 2001. "Let's Make a Deal - the Impact of Social Security Provisions and Firm Liabilities on Early Retirement," Discussion Papers 260, VATT Institute for Economic Research.
    16. Ulrike Schneider & Birgit Trukeschitz & Richard Mühlmann & Ivo Ponocny, 2013. "“Do I Stay Or Do I Go?”—Job Change And Labor Market Exit Intentions Of Employees Providing Informal Care To Older Adults," Health Economics, John Wiley & Sons, Ltd., vol. 22(10), pages 1230-1249, October.

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