Working Paper: CEPR ID: DP18149
Authors: Elisabeth Artmann; Nicola Fuchs-Schündeln; Giulia Giupponi
Abstract: We provide new evidence of forward-looking labor supply responses to changes in pension wealth. We exploit a 2014 German reform that increased pension wealth for mothers by an average of 4.4% per child born before January 1, 1992. Using administrative data on the universe of working histories, we implement a difference-in-differences design comparing women who had their first child before versus after January 1, 1992. We document significant reductions in labor earnings, driven by intensive margin responses. Our estimates imply that, on average, an extra euro of pension wealth in a given period reduces unconditional labor earnings by 54 cents.
Keywords: Labor Supply; Social Security; Pension Wealth
JEL Codes: H55; J22; J26
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| pension wealth (H55) | intensive margin responses (C24) |
| pension wealth (H55) | extensive margin responses (C24) |
| higher pre-reform pension wealth (H55) | larger reductions in labor supply responses (J49) |
| higher partner earnings (J31) | larger reductions in labor supply responses (J49) |
| pension wealth (H55) | labor earnings (J31) |
| pension wealth (H55) | total unconditional earnings (J31) |
| 2014 mutterrente reform (H55) | pension wealth (H55) |
| 2014 mutterrente reform (H55) | labor earnings (J31) |