Public Pension Reforms and Retirement Decisions: Narrative Evidence and Aggregate Implications
American Economic Journal: Economic Policy
vol. 15,
no. 4, November 2023
(pp. 142-82)
Abstract
We construct a database of public pension policy changes with motivation and implementation information for ten OECD countries. Structural pension reforms, motivated by long-run sustainability concerns, often come with prolonged phase-in periods. In response to pension retrenchments implemented immediately, people close to retirement stay in the workforce longer. News about future pension retrenchments with implementation lags, however, is likely to lead this group to exit the labor market. This decline in the labor force participation rate is particularly strong for reforms with long lags, ones that introduce fundamental policy changes, and ones where citizens have lower trust in the government.Citation
Bi, Huixin, and Sarah Zubairy. 2023. "Public Pension Reforms and Retirement Decisions: Narrative Evidence and Aggregate Implications." American Economic Journal: Economic Policy, 15 (4): 142-82. DOI: 10.1257/pol.20200881Additional Materials
JEL Classification
- E62 Fiscal Policy
- H55 Social Security and Public Pensions
- J14 Economics of the Elderly; Economics of the Handicapped; Non-labor Market Discrimination
- J22 Time Allocation and Labor Supply
- J26 Retirement; Retirement Policies
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