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Micro-Modeling of Retirement Decisions in Germany

B�rsch-Supan, A and Schnabel, R and Kohnz, S and Mastrobuoni, G (2004) 'Micro-Modeling of Retirement Decisions in Germany.' In: Gruber, J and Wise, DA, (eds.) Social Security Programs and Retirement around the World: Micro-Estimation. NBER Chapters . National Bureau of Economic Research, Inc, 285 - 344. ISBN 0-226-31018-3


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Early retirement in Germany is very costly and amplifies the burden which the German public pension system has to carry due to population aging. This paper shows that the German pension system provides strong incentives to retire early. The paper provides relatively robust econometric evidence for the strength of incentive effects on old age labor supply, using several specifications of incentive variables. The econometric estimates are used to simulate the individual responses to policy changes. The adjustment factors for early retirement introduced by the 1992 pension reform are estimated to increase the retirement age of men by about 1.5 years. This increase is almost the same as the effect from a shift in the ?normal retirement? age from 65 to 67. Introducing (almost) fair adjustments (6% per year of delay) would increase the retirement age by about 2 years and 2 months. The effects are about half the size for women.<P>(This abstract was borrowed from another version of this item.)

Item Type: Book Section
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Jim Jamieson
Date Deposited: 23 Feb 2015 10:20
Last Modified: 17 Aug 2017 17:39

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