Two pension reforms in Austria increased the early retirement age from 60 to 62 for men and from 55 to 58.25 for women. The reforms reduced early retirement by 18.9 percentage points among affected men aged 60-62 and by 22.3 percentage points among affected women aged 55-58.25. The associated increase in employment was merely 6.8 percentage points among men and 10.1 percentage points among women. The reforms had large spillover effects to the unemployment insurance program but negligible effects on disability insurance claims. Specifically, unemployment increased by roughly 10 percentage points both among men and women. Spillover effects had substantial fiscal implications. Absent spillover effects, the reduction of net government expenditures would have amounted to 264 million Euros per year. Due to higher unemployment insurance claims and associated foregone income tax revenues the actual reduction was only 148 million Euros. High-wage and healthy workers carried the bulk of the fall in net government expenditures. Low-wage and less healthy workers generated much less government savings as they either continue to retire early via disability pensions or bridge the gap to regular retirement by drawing unemployment benefits.

/pdf/does-raising-the-retirement-age-increase-employment-of-older-hfiai1meol.pdf

Does Raising the Retirement Age Increase Employment of Older Workers

Contrary to standard search model predictions, prior studies failed to estimate a positive effect of unemployment insurance (UI) on reemployment wages. This paper estimates a positive UI wage effect exploiting an age-based regression discontinuity in Austrian administrative data. A search model incorporating duration dependence determines the UI wage effect as the balance between two offsetting forces: UI causes agents to seek higher-wage jobs, but also reduces wages by lengthening unemployment. This implies a negative relationship between the UI unemployment duration and wage effects, which holds empirically both in our sample and across studies, reconciling disparate wage-effect estimates. Empirically, UI raises wages by improving reemployment firms' quality and attenuating wage drops.

https://papers.ssrn.com/sol3/Delivery.cfm/dp9034.pdf?abstractid=2604397&mirid=1

Does Extending Unemployment Benefits Improve Job Quality

http://www.labornrn.at/wp/2012/wp1206.pdf

Does Raising the Early Retirement Age Increase Employment of Older Workers

The impact of stricter criteria for disability insurance on labor force participation

We study whether employment prospects of old and young workers differ after a plant closure. Using Austrian administrative data, we show that old and young workers face similar displacement costs in terms of employment in the long-run, but old workers lose considerably more initially and gain later. We interpret these findings using a search model with retirement as an absorbing state, that we calibrate to match the observed patterns. Our finding is that the dynamics of relative employment losses of old versus young workers after a displacement are mainly explained by different opportunities of transition into retirement. In contrast, differences in layoff rates and job offer arrival rates cannot explain these patterns. Our results support the idea that retirement incentives, more than weak labor demand, are responsible for the low employment rates of older workers.

Too Old to Work, Too Young to Retire?

The Austrian Social Security Database (ASSD) is a matched firm-worker data set, which records the labor market history of almost 11 million individuals from January 1972 to April 2007. Moreover, more than 2.2 million firms can be identified. The individual labor market histories are described in the following dimensions: very detailed daily labor market states and yearly earnings at the firm-worker level, together with a limited set of demographic characteristics. Additionally the ASSD provides some firm related information, such as geographical location and industry affiliation. This paper is a short description of this huge data base and intended for people using this data in their own empirical work.

/pdf/austrian-social-security-database-58l8hfum1y.pdf

Austrian Social Security Database

/pdf/austrian-social-security-database-54vclal035.pdf

Jean-Philippe Wuellrich

Papers

Austrian Social Security Database

Austrian Social Security Database